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NFP Posts Yet Another Beat as US Job Market Proves Resilient, USD Rises

US Equities Update: S&P 500, Nasdaq, Dow Rise on Dovish Powell

NFP Data Analysis and Market Reaction

  • November NFP data reveals 263k jobs added to the US economy
  • Average hourly wage growth comes in at twice the expected figure (0.6% vs 0.3%) MoM – worrying for signs of wage-price spiral
  • Unemployment rate remains unchanged at 3.7%
  • The analysis in this article makes use of chart patterns and key support and resistance levels. For more information visit our comprehensive education library

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November NFP Posts Another Beat as the US Job Market Proves Resilient

  • November NFP data reveals 263k jobs added to the US economy
  • October figure of 261k revised up to 284k
  • Average hourly wage growth comes in at twice the expected figure (0.6% vs 0.3%) MoM

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The November NFP data surprised to the upside for a 7th time in a row and the October figure was revised higher, stressing that the US labor market continues to show signs of great resilience despite tightening financial conditions. Something that may be of concern to Fed members is the month on month and year on year rise in average hourly wage growth however, this tends to result from the fact that employees have greater bargaining power when there aren’t many people waiting to fulfil vacant posts. Companies therefore, acquiesce to higher wage demands.

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The impressive NFP data threatens to end the recent dollar selloff and delay the opinion that there has been a fundamental, dovish shift within the Fed. Recent dovish language from the Fed had markets pricing in a lower terminal rate for the Fed funds rate, settling a little below 4.9%, accompanied by a continued move lower in the US 10 year yield to 3.5% – rising to 3.68% after the data.

Jerome Powell’s remarks on Wednesday about a 50 bps hike and the risk of overtightening dovetailed with the dovish minutes of the November Fed meeting where the takeaway excerpt read, “ a substantial majority of participants judged that a slowing in the pace of increase would likely soon be appropriate”. The committee will now have to assess whether it will be more appropriate to reconsider another 75 bps hike later this month, although, markets have only shifted from a 9% to 15% chance of that happening so the bar may still be relatively high for that outcome.

US Dollar Index (DXY)

Source: TradingView, prepared by Richard Snow


US 10 Year Treasury Yield


Source: TradingView, prepared by Richard Snow

Gold Daily Chart


Source: TradingView, prepared by Richard Snow

— Written by Richard Snow for

Contact and follow Richard on Twitter: @RichardSnowFX


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