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Unemployment Rate Dips as Job Growth Stays Solid. What Now for Stocks, Dollar?


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SEPTEMBER JOBS REPORT KEY POINTS:

  • The September jobs report showed that the U.S. economy added 263,000 workers last month versus expectations of a gain of 250,000 payrolls. Meanwhile, the unemployment rate fell to 3.5%, two-tenths of a percent below forecasts
  • Average hourly earnings rose 0.3% on a monthly basis and 5.0% compared to a year ago, matching estimates
  • The resilient labor market is likely to keep the Fed on a hawkish path

Unemployment Rate Dips as Job Growth Stays Solid. What Now for Stocks,  Dollar?

 

 

MARKET REACTION TO NFP REPORT

Immediately following the release of the September jobs report, the U.S. dollar, as measured by the DXY index, spiked higher, bolstered by a solid jump in U.S. Treasury yields. Meanwhile, S&P 500 and Nasdaq 100 futures plunged into negative territory, falling more than 1.5% at the time of writing.

Strong labor market data is likely to keep the Fed on the hawkish path, prompting policymakers to deliver additional interest rate hikes and preventing them from pivoting prematurely toward a dovish posture. This scenario should favor the U.S. dollar, but could create strong headwinds for equities.

 

Oct 7, 2022 | DailyFX
Diego Colman, Strategist

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