Non-agricultural explosion!U.S. dollar index jumps while gold prices tumble on Fed’s aggressive rate hike expectations

U.S.7new monthlynon-farm employmentnumber of people52.810,000, greatly exceeding expectations; the unemployment rate fell slightly to3.5%.After the better-than-expected nonfarm payrolls reportDollarrise rapidly,Spot goodsgoldThe pressure falls.

U.S. Bureau of Labor Statistics(BLS)8moon5day(Friday)Published data show that7Monthly new non-farm payrolls52.810,000,000, a record since2022year2The biggest increase since the month, not only higher than6recorded in the month37.2Wan also significantly exceeded market expectations25Ten thousand.7Monthly unemployment rate edged down to3.5%better than market expectations and previous values3.6%.

U.S. dollar index rises after big-beater-than-expected nonfarm payrolls report(DXY)Short-term surge70Points, gold fell sharply under pressure, once fell more than15Dollar. As of this writing, the U.S. dollar index is holding steady above 106.50, while the price of gold has fallen below the $1,770/oz round mark.

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Private sector job creation across sectors of the economy47.110,000, the number of new jobs in manufacturing310,000, government sector employment increased5.7The detailed data are shown in the table below:

category
July 2021
May 2022
June 2022
July 2022

Changes in employment by industry

(unit: thousand people)

Changes in Nonfarm Payrolls
689
386
389
528

Private Sector
638
331
404
471

commodity production
82
61
51
69

Mining and Logging
3
7
8
7

construction industry
17
35
16
32

manufacturing
62
19
27
30

Durable Goods
48
8
8
twenty one

Auto & Parts
17.7
-7.4
0.6
-2.2

non-durable goods
14
11
19
9

private service
556
270
353
402

Wholesale trade
18.2
13.1
5.7
10.5

retail trade
16.2
-43.7
22.1
21.6

Transportation and Warehousing
39.9
38.1
twenty one
20.9

Public utilities
0.1
0.6
1.4
0.4

information
twenty one
26
twenty four
13

financial activity
27
10
6
13

Professional business services
142
69
91
89

Temporary help service
23.2
5
4.3
9.8

Education and Health Services
59
78
109
122

Health Care and Social Assistance
34.1
57.4
88.4
96.6

Leisure and Accommodation
197
69
74
96

other service
36
10
-1
15

government department
51
55
-6
57

Data Sources:BLS,Depend onLisa YinForm made

In terms of salary,6Month-on-month average hourly wage increases0.5%or15cents to32.27U.S. dollar, higher than expected and previously recorded0.3%; Average hourly wages rose year-on-year5.2%which also exceeded market expectations4.9%and previous value5.1%.In addition, the average weekly hours worked for all employees in private nonfarm payrolls increased from the previous34.5slightly increased to34.6hours, more than expected34.5. In the same month, the employment participation rate increased from 6recorded in the month62.2%fell slightly to62.1%which is expected to be62.2%.

The U.S. Bureau of Labor Statistics said job gains were generally recorded, with notable gains in leisure and hospitality, professional and business services, and healthcare.By July, total nonfarm payrolls and unemployment rate both returned to 20202levels before the pandemic.

Undoubtedly, after the Fed officials frequently voiced down the market’s expectations for the Fed’s policy shift, the beautiful non-agricultural data that exceeded expectations has further strengthened.FedThe promise of aggressive rate hikes to keep inflation down.according toCME Fed Watch Tool (Fed Watchtool)the market bets on the Fed9rate hike again75bps expectations are less than50%The probability of increasing significantly to the current67.5%.

source:CMEgroup

The U.S. nonfarm payrolls report, which beat expectations by a wide margin, showed that labor market demand has firmed, which not only eased recent recession fears to a certain extent, but also suggested that the Federal Reserve will continue to raise interest rates sharply to curb high inflation. This coincides with the recent Federal Reserve officials’ frequent statement to convey a firm attitude to control inflation. At the same time, the Fed’s firm attitude towards the interest rate hike cycle is also one of the main factors supporting the sharp rebound of the US dollar index from the recent lows. Of course, the Fed’s determination to raise interest rates by 75 basis points again in September may have to wait for the assistance of the latest CPI (consumer price index) data released next week.

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