The US NFP in December fell to its lowest level in 2021. The US dollar also weakened although analysts are optimistic that the data will not shake the Fed's hawkish outlook.
US Non Farm Payroll (NFP) in December 2021 fell. According to the US Department of Labor report, US NFP only increased by 199,000 at the end of 2021. The figure was far below expectations of 400,000 and down from November NFP which was revised up to 249,000.
It is not known for certain whether the increase in cases of infection with the Omicron variant was the cause of the sluggish US NFP last month. The reason, this report only covers two weeks before the spike in infections occurred in the US, namely before Christmas.
Nevertheless, US employment in general is still close to the maximum condition. The US Unemployment Rate fell from 4.2% to 3.9% in December, while Average Hourly Wages rose from 0.4% to 0.6%.
"There's plenty of evidence that the labor market is tightening," said Stephen Stanley, chief economist at Amherst Pierpont Securities. "The unemployment rate sliding below 4% ahead of schedule is the highest signal of tight employment."
Therefore, analysts expect that the Fed can continue their monetary tightening policy. "Even though the headline numbers don't reach consensus, consensus doesn't really matter to the Fed. For them, the data justifies their hawkish tendencies," said Brian Jacobsen, senior investment strategist at Allspring Global Investments, Wisconsin.
"We'll have to see how they go along with their hawkish talks. However, the odds of a rate hike in March or May are increasing and (as well as) a reduction in the balance sheet starting late next year."
US Dollar Weak After US NFP Release
Although the market is still optimistic about US employment, the US Dollar continues to decline in response to the release of NFP data this time. The Dollar Index fell 0.52% to 95.73 in its biggest daily decline since Nov. 26.
According to Reuters and U.S. calculations Commodity Futures Trading Commission, long positions of speculators against the US Dollar have indeed fallen in the past week. The value of the dollar's net long positions was $18.87 billion for the week ended January 4, lower than the $19.15 billion net long position of the previous week.
Post a Comment for "US Non-Farm Payroll Slumps, Dollar Drops"