The US labour market exceed expectations for job growth with employers adding 211,000 workers last month while unemployment rate remains 5 percent, Labor Department report showed Friday. The increase in payrolls further reaffirmed Federal Reserve Chair Janet Yellen’s confidence that the economy is strong enough for higher borrowing costs.
“It was a broad-based gain across all sectors, and that’s absolutely essential,” said John Silvia, chief economist at Wells Fargo Securities LLC in Charlotte, North Carolina, whose forecast for payrolls was among the closest. The jobs report “is a bright green signal for the Fed to go ahead and move in December,” and indicates future rate increases should proceed at a “moderate pace.”
A positive hiring rate has once again raised the odds that Federal Reserve officials will raise interest rates in their next meeting this month. According to the Fed, the pace of future increases will depend on progress recorded towards central bank’s inflation goal.
Even with the struggling Euro after ECB stimulus declaration failed to impress investors, the US dollar index dropped from 12123 to 12064 today and lost 0.03 percent against the euro. Though, it is assumed that the market is yet to defuse current economic situation behind ECB as majority of traders up till now do not have clear picture of what it’s to happen going forward.