This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
The October report showed that 271,000 jobs were added, which compared with the forecast of only 185,000. The poor September number was revised down to 137,000 from 142,000 – but today’s headline number took all the attention. The unemployment rate dropped to 5%, in line with market expectations. The hidden gem of the announcement was the average hourly earnings which rose by 0.4% and 2.5% on a monthly and yearly basis respectively. The combination of falling unemployment and rising earnings has increased the likelihood of an interest rate hike from the Federal Reserve in December.
The greenback jumped on the announcement, while the euro and the pound lost out heavily. The so-called commodity currencies like the Australian and Canadian dollar also declined at the hands of the US dollar. Gold and silver quickly lost ground after the announcement, and their outlook is bleak. Both Wall Street and the US 500 had a move in either direction in the wake of the announcement, and both are drifting lower as higher interest rates could be achieved this year.