Going into today’s US nonfarm payroll release expectations were for a strong number with many believing there’d be a better figure than the expected 215k and more towards the three month average which stands at 234k. Yesterday’s ADP number helped the optimism in the market and ahead of the release the dollar appreciated slowly. That dollar strength followed through more impressively after the release which came in at 288k just below some of the highest estimates.
With the unemployment rate also declining to 6.1% the US can confine to history the incredibly harsh winter it suffered, which caused a huge hiccup in its latest GDP reading. The future is brighter and now the US can look forward to a stronger economy as the labour market continues to improve, as evidenced by not only today’s data, but the initial jobless claims that have been continuing to trend downwards throughout the year.
Many investors have been waiting for stronger evidence that the world’s largest economy is in good shape and today certainly does that. This will allow the Federal Reserve to continue in its tapering and even prepare the ground for raising rates next year.