US Labour Market Surges as NFP Defies Expectations
The US labour market experienced a significant surge in August, exceeding expectations with a total nonfarm payroll (NFP) of 162,000, nearly triple the consensus. This is the strongest NFP reading for five months and comes as a challenge to the narrative of a weakening job market.
Despite this strong performance, the dollar's initial reaction was muted, with traders awaiting the upcoming inflation data on September 11. The unemployment rate remained steady at 4.1%, down slightly from the beginning of the year.
The strong NFP has bolstered expectations for a Federal Reserve (Fed) interest rate hike in September, with a 60% probability according to CME FedWatch. However, this is not reflected in the current inflation expectations, which are still uncertain ahead of the release on Friday.