📉US500 pulls back after NFP report❗

1:44 PM February 3, 2023

💥Equites under pressure, while USD strengthens on better than expected US jobs report

Major Wall Street indices trimmed recent gains, while greenback appreciated sharply against other G10 currencies after the US economy unexpectedly created 517K jobs in January, way above an average monthly gain of 401K in 2022 and analysts estimates of 185K and contrary to recent ADP report.  Job growth was widespread in January, led by gains in leisure and hospitality, professional and business services, and health care. Employment also increased in government, partially reflecting the return of workers from a strike.

The unemployment rate in the US inched lower to 3.4% in January , the lowest level since May 1969 and below market expectations of 3.6%, as the number of unemployed people declined by 28k to 5.69 million and the number of employed increased by 894 k to 160.1 million. The latest jobs report came on the heels of a sharp decline in weekly jobless claims to nine-month lows and a larger-than-expected increase in the level of job openings in December to a five-month high.

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Average hourly earnings for all employees on US private nonfarm payrolls increased by 4.4% from a year earlier in January, after an upwardly revised 4.8% rise in the prior month and slightly above market estimates of 4.3%. It was the smallest annual growth in average hourly earnings since August of 2021.

Today's reading signals that the labour market is still tight and limits bets that the FED will ease the tightening process rapidly in the near future

The prognostic correlation between ADP and NFP data has greatly diverged. Source: XTB Research

US500 retreated from recent high at 4175 pts after today's data release.Source: xStation5


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