Yahoo Finance The US Unemployment Has Been Steadily Rising Since March. What to Expect Next? Possible Scenarios for the Dollar
Employment and Inflation Data to Influence Interest Rate Decision
On the 5th of July, the U.S. Labor Department is due to submit another report on the number of people employed in the non-agricultural sector. According to experts’ expectations, the number of employed will decrease to 190,000 in June, despite the fact that in May this figure was at the level of 272,000. Meanwhile, according to forecasts, the unemployment rate will remain stable at 4.0%. The US Federal Reserve is already receiving positive signals to reduce inflation and unemployment data combined with NFP may strengthen sentiment in the direction of lowering the interest rate in the coming months.
As a result, a change in the interest rate will have a strong impact on the entire financial market and on investor sentiment. On Tuesday, the JOLTS Job Openings data showed an increase of 221,000 from the previous month to 8.140 million in May 2024, exceeding expectations. This data provides a positive signal for a potential reduction in unemployment. Average hourly earnings for all employees on U.S. private nonfarm payrolls increased by 14 cents, or 0.4%, to $34.91 in May 2024.
June NFP Preview: US Dollar Strength Hinges on Unemployment Rate, Job Openings Outcome
The U.S. unemployment rate reached a two-year high, hitting 4.0% in May 2024, the lowest level in more than two years. Analysts believe that the unemployment rate in June will remain at the May level of 4.0%. “The increase in job openings could help address the rising unemployment issue and, consequently, inflation,” said Kar Yong Ang, a financial market analyst at Octa. “The rise in unemployment amid increasing job openings indicates that the available jobs do not meet the population’s expectations.
Thus, the labor market is experiencing a cooling,” he added. Over the past month, the U.S. Dollar Index increased by 1.17% to 105.85 points. If the support level of 104 points is breached, further decline in the U.S. Dollar Index to 101.9 points can be expected. However, if the upward trend since the beginning of the year continues and solidifies above the 106.5 level, market sentiment will favor U.S. dollar buyers.
About Octa
Octa is an international broker that has been providing online trading services worldwide since 2011.
This article was originally posted on FX Empire
