Nonfarm Payrolls: US Labor Market expanded much better than forecast

According to the US Department of Labor, the number of jobs in the non-agricultural sector of the country increased by 678 thousand in February. The forecast assumed an increase of 400 thousand. 

The unemployment rate dropped to 3.8%. Analysts had expected an indicator of 3.9%. Data for January showed unemployment at 4%.

The average hourly wage in February decreased by 5.1% year-on-year from 5.7% in January. Forecasts suggested an increase of 5.8%. 

The NFP report supported the US currency exchange rate – the dollar index is growing to 98.80 from 97.60 and is at session highs. At the same time, the EUR/USD pair is on the verge of falling below 1.0900, and GBP/USD is already trading below 1.3250. The USD/JPY pair was less volatile and remained around 115.30-115.45.

Analysts note that the latest report demonstrates the strengthening and stability of the American labor market. Moreover, the number of new Omicron COVID-19 infections has significantly decreased, so market participants were ready for strong statistics. Nonfarm Payrolls, which significantly exceeded forecasts, once again reinforced confidence in the interest rate hike by the US Federal Reserve, which will take place this month.