Non-Farm Employment Beats Expectations in US: Latest Economy Update
US Unemployment Rate at Lowest in 54 Years, Non-Farm Employment Up
The latest announcement from the US Department of Labor has sent waves through to the global economy. Non-farm employment for April was reported to have increased by 253 thousand, well above expectations of 180,000. This signifies a major uptick in employment and economic activity across the United States.
But perhaps even more impressive was the news that the US unemployment rate has now declined to its lowest in 54 years. The unemployment rate dropped from 3.5 percent to 3.4 percent, a record low not seen since 1969. This is welcome news for the American economy and is expected to have a positive effect on the markets.
Along with increased employment numbers, hourly earnings also exceeded expectations, rising by 0.5 percent compared to an expected increase of 0.3 percent. This will be an important indicator for inflation moving forward. Year-on-year wages rose by 4.4 percent, further above expectations for a 4.2 percent increase.
After the announcement, we saw the dollar index increase from 101.3 to 101.7, while gold prices dropped by 2 percent from $2,034 to $2,8 per ounce.
The hotly anticipated data has also had an effect on the Federal Reserve’s impending decision-making process. The US Federal Reserve Chairman Jerome Powell has emphasized the fight against inflation, and stated that they will make data-driven decisions regarding their actions in response to economic indicators. The Fed is trying to bring inflation down to 2 percent annually, and with inflation currently standing at 5 percent, it looks like more action may be necessary.
Overall, these economic indicators signify a strong outlook for the American economy moving forward, with increased employment numbers, higher hourly earnings and a near-record low unemployment rate.
