US Labor Market Data Sparks Rate Hike Fears as Inflation Soars

The strong labor market data released in the US has sent shockwaves through markets worldwide. The NFP report showed that the country created 162,000 nonfarm payroll jobs in August, triple the expected figure of 55,000. This has pushed the probability of a Fed rate hike at the September meeting to approximately 58%, up from just under 50% the day before.

The strong employment data has been seen as good news for the economy, but it also increases the risk of further monetary policy tightening by the Federal Reserve. President Donald Trump demanded an immediate interest rate cut from the Fed shortly after the release of the labor market data, arguing that a strong economy means better creditworthiness for the country.

The escalating tensions between the US and Iran have pushed Brent crude toward its strongest weekly gain since July, with prices holding near $90 per barrel. The high price of diesel in the US has reached a record $5.85 per gallon, representing a nearly 60% year-over-year increase.