The case is updated.
Figures on Friday show that in May there were 337,000 new jobs outside the US agricultural sector. The figures are almost twice as high as expected (see further in the case). Unemployment in the US at the end of the month was a low 3.7 per cent. In April, the world’s largest economy managed to create 253,000 new jobs.
These figures for job growth and unemployment come at 14.30 Norwegian time on the first Friday of each month. They are important for the world’s financial markets and are often referred to as “the most important figures of the month”. Deviations from expectations can affect both the stock market and the interest rate market.
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The main index at Oslo Børs was up 1.61 per cent before the figures were known. The stock market rises at 14.39 to 1.75 per cent as a result of the good figures. The important ten-year US government yield was ahead of the figures at 3.62 percent. The corresponding interest rate with a two-year term was 4.36 per cent. At 2.45 pm the interest rates had risen to 3.65 per cent and 4.44 per cent respectively.
These interest rates normally rise if the figures for job growth are better than expected. It indicates that interest rates may rise more than expected in the future, and the economy is doing well. If the figures are worse than what the experts thought, the opposite may happen.
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Cooling in the labor market
In the morning report, Handelsbanken predicted a slight cooling of the labor market from April. They expected a decline to 195,000. Unemployment was expected to rise marginally from 3.4 per cent to 3.5 per cent. There was thus a somewhat higher unemployment rate.
DNB Markets made a point that the previous report showed a surprisingly strong upturn in growth. The fall in unemployment to 3.x percent came as a surprise. All in all, DNB believes the April report indicated a strong labor market.
The job weight in May was particularly strong among academics, the public sector, healthcare, construction, transport and storage. The negative is that the number of unemployed Americans increased by 441,000 to 6.1 percent. Unemployment has now fluctuated between 4.3 per cent and 3.7 per cent since March 2022.
Hourly wages rose on average in May by 0.3 percent to 33.44 dollars. With a dollar exchange rate today of NOK 11, this corresponds to NOK 368. Growth was in line with expectations.
2023-06-02 12:31:34
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