Bullish Non-Farm Payroll Stokes USD Demand

Bullish Non-Farm Payroll Stokes USD Demand

Friday 4th March 2022 – 14:07 (GMT)

Unemployment levels in the US continued their strong start to 2022, further strengthening USD demand and adding weight to faster interest rate hikes by the Federal Reserve.

Non-farm payroll figures released by the US Bureau of Labor Statistics have shown the worlds largest economy added 678,000 jobs over February, the strongest gain in seven months and way above forecasts of 400,000.

Average earnings remained flat, however the overall unemployment level dropped from 3.9% to 3.8% over the same period. That leaves US employment 2.1 million jobs below its pre-pandemic level, with many economists predicting the job market could recover all its pandemic losses by the end of 2022.

Attentions turn to the next Federal Reserve meeting on the 16th March, with a 0.25bps increase to the base rate now widely anticipated. Inflation continues to outpace wage growth and the central bank is keen to cool what is perceived as an overheating US economy.

The latest readings also pushed US dollar levels to yearly highs as the Ukraine crisis continues to grow. Russian troops captured more territory over the last few days whilst also stepping up their bombardment of the country’s largest cities.