Friday Aug 6 2021 14:36
3 min
The US economy added 943,000 new jobs in July according to today’s nonfarm payrolls print.
The unemployment rate fell to 5.4% according to the US Bureau of Statistics as hiring rose at its highest rate for nearly a year last month. The payroll increase was also the largest since August 2020.
New jobs have been added to the economy for six consecutive months.
Estimates had varied wildly this morning before this afternoon’s report was published. Some more pessimistic economists had predicted 350,000 new jobs. Some put the figure closer to 1.2m. However, the Dow Jones estimate came to 845,000. Given this is pretty much the gold standard for NFP number forecasting, we can consider today’s report a big success.
This is doubly true given the market was expecting labour shortages, caused by businesses’ perceived hiring difficulties and rising Delta variant cases.
Average hourly wages increased 0.4% on a monthly basis, beating forecasts. Wages are now 4% higher than they were a year ago.
“The data for recent months suggest that the rising demand for labour associated with the recovery from the pandemic may have put upward pressure on wages,” the BLS said in the report. It was also quick to point out that Covid is still skewering the data.
Overall, job participation stands at 61.7% – the highest level since March 2020. Are things getting back on track for the US? This report certainly suggests that the case.
However, let’s be realistic. The Delta variant is running rampant in the US, where infections are up to 100,000 per day. While these stats are all very encouraging, the pandemic is by no means over.
The Dow Jones rose 155 points, equating to 0.4%, reaching an intraday record high. Likewise, the S&P 500 rose 0.2% for its own intraday all-time high. The Nasdaq, due to its tech-heavy nature, did not fare so well, dropping 0.2%.
According to CNBC, bank stocks powered today’s gains. Wall Street big names like JPMorgan, Bank of America, and Wells Fargo all recorded 1% gains at market open. Gains were also seen in energy, retailer, and industrial stocks.
On the flip side, tech stocks fell. Observers suggested this may be from investors taking money out of these and push them into growth stocks. Amazon, Apple, and Salesforce were trading slightly down.
The dollar continued to rally on today’s strong NFP report. The dollar index had climbed 0.56% to reach 92.81.
Subsequently, GBP/USD and EUR/USD pulled back on the stronger dollar. At the time of writing, GBP/USD was floating around the 1.387 level, after starting the day pushing over 1.390. EUR/USD was down about 0.67% at the 1.176 mark.
Latest
View all
Tuesday, 19 November 2024
4 min
Monday, 18 November 2024
5 min
Monday, 18 November 2024
3 min
EN
