Fed doves will cheer today’s NFP & wage growth report

US economy added 222K jobs, unemployment rate ticked up to 4.4%, labor force participation rate rose to 62.8%, wage growth 2.5% y/y vs. 2.6% expected.
This is being widely called as a solid report. In a way it is. One could argue the improving economic conditions is forcing people to return to labor market. The strong NFP indicates there is still considerable slack in the labor market.
Meanwhile, wages remain weak… so consumer spending is likely to remain anemic + it also means low/weak inflation.
So the easy monetary policy is working = it is boosting labor pool, but isn’t boosting wage price inflation. So it makes sense to go slow with the rate hikes. Hence, I believe the USD could be sold against most majors except GBP and JPY.


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