News Update


Expectations of rate hikes are fueled by strong employment growth in the United States.

According to Labor Department data, employers added 336,000 jobs in September, over doubling the 170,000 predicted.

Data for August was also revised higher, showing that 227,000 jobs were generated rather than the previously reported 187,000.

The US unemployment rate stayed at 3.8%.

The leisure and hospitality sector alone added 96,000 jobs in September, above the monthly average, with employment in food services and bars increasing by 61,000 and reverting to pre-pandemic levels.

While job creation increased, monthly salary growth remained moderate in September, with average hourly wages reaching 4.2% year on year.

The US Federal Reserve maintained its key interest rate constant last month as it assesses whether it has done enough to stabilize inflation, which is the rate at which prices grow.

The Federal Reserve’s rate target range of 5.25%-5.5% is the highest in over two decades. In order to keep increasing prices under control, the ECB hiked borrowing charges from near zero in March 2022.

However, the employment market’s resiliency in the face of the Federal Reserve’s efforts to chill the economy has led to speculation that interest rates will remain low for some time.

According to Janet Mui, head of market analysis at asset manager RBC Brewin Dolphin, the 336,000 employment increases “far exceed even the most optimistic estimate.”

Following Friday’s data, traders increased their bets that the Fed will raise interest rates before the end of the year and keep them high for a longer period next year.

The strong job growth, according to Brian Coulton, chief economist at ratings agency Fitch, will “keep upward pressure on wages, making it more likely that the Fed has further to go in raising interest rates.”


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