On the other hand, we saw an important pro-inflationary factor – accelerated wage growth to 5.1% YoY. The gross payrolls index is now just 1.5% below the peak in February, while employment is 6.5% lower. An increase in this indicator leads to an overall increase in earnings and boosts consumer confidence.
Strong wage growth has marginally outweighed the effect of the downturn in employment. However, traders should bear in mind that the psychological effect of lower employment could trigger a mini-wave of demand for defensive assets. Although this can hardly be seen as a reversal of rising equities and a declining dollar trend.
The FxPro Analyst Team