NFP Recap: First US job decline in seven years, lower unemployment, higher wage growth
James Chen, CMT October 6, 2017 9:52 AM
Overall, the jobs report for September was mixed, with substantial deviations from expectations in both directions. Since a significant impact from the hurricanes had already been expected, however, the decline in jobs was seen more as an anomaly rather than any negative indication of the US employment landscape. Indeed, Dallas Federal Reserve President Robert Kaplan stated to media on Friday, post-NFP, that labor markets are actually tightening despite the weak jobs data for September. Also, the rise in wage growth and drop in the unemployment rate helped to mitigate the negative headline outcome.
Because of these mitigating factors as well as the fact that markets had already discounted September’s anomalous weather impact, the immediate market reaction was dollar-positive and negative for gold. In fact, the market-viewed likelihood of a December rate hike by the Fed actually rose above 90% at one point after the data release. Amid these high expectations, and despite the large downside surprise in September job growth, the US dollar appears poised to resume and extend its recent recovery.
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