US Economy Adds 209,000 Jobs in June as Labor Market Slows Down
The total number of new jobs in America has reportedly dropped to the lowest ever rate since December 2020. The metric was shared by the US Bureau of Labor. As per the government agency, the total number of new jobs in the country has remained at a low count of 209,000 for June 2023.
The statistics account for nonfarm payrolls (NFP). NFP indicates the total number of salaried personnel in the country excluding farmers, farm workers, and some other blue-collar job classifications. The report by the government agency has pin pointed the devaluation of USD.
Consequently, USD declined by 0.25%. During March, the NFP metric was noted at 339,000 indicating a 0.1% fall in June. In terms of fundamental market development, the dropping NFP translates into a cooling down of the labor markets.
It is worth noting that the actual recorded NFP for June was also lower than the expected projection of the Bureau of Labor which stood at 225,000. On the YTD scale, the metric remained optimistic but in comparison to the same data from May, June remained the slowest month for new job creation since December when payrolls dived from 268000 to 220000.
The unemployment rate for June declined from 3.7% to 3.6% which is lower than the projections issued by government agencies. On the other hand, the yearly wage inflation remained static at 4.4% which was positive in comparison to the forecasted expectation of 4.2% for June.
On the other hand, the biggest chunk of new jobs was witnessed in the government sector. The governance body alone created 60,000 new jobs on state and local scales. Meanwhile, other industries that created the most amounts of jobs in the country include caretakers (24K), healthcare (41K), and civil development (23K).
This report was issued shortly after the publication of the ADP National Employment Report. The report is compiled by a private firm called Automatic Data Processing and is indicative of total payrolls in the private sector in the USA that stood at 497000 for June.
The estimate for this metric was projected to be around 220,000 by Dow Jones for the previous month. However, soon after the publication of the NFP report USD index (DXY) fell by 0.25% hitting the lowest in the last 10 days.
US Dollar Continues to Lose Value Following Pessimistic NFP Projections
The USD value declined following the projections of less-than-expected NFP scores. The consumers in the region have their eyes glued to DXY as it is testing the 100-day moving average support.
To this effect, a closing price below the 100-day MA could lead to further devaluation of the USD. At the same time, experts believe that NFP readings are a suitable pretext for Fed to hike interest rates further.
The Central Bank has continued to inflate the interest rates since the start of the year raising it by 500 basis points. To this effect, Fed has managed to strike down the inflationary pressure from 9.1% to 4%.
Nevertheless, inflation has remained higher than the estimated 2% target set by the Central Bank. Since the target is still not reached, experts opine that the hike in May is not the last installment in the series.
