In-depth Analysis

NFP Day

The key focus for last Friday’s forex trading was the release of US jobs data for April.

Payrolls rose by 428k as unemployment rate holds at 3.6%.

Here are the key takeaways from the April nonfarm payroll (NFP).

  • Stock futures weaker after dramatic day of selling
  • Gold holds gains after better-than-expected U.S. employment data
  • 10-year Treasury yield edges further above 3% ahead of U.S. jobs data
  • The bond expert who called the spike in U.S. yields forecasts the 10-year to reach 4%

U.S. job growth increased more than expected in April, underscoring the economy’s strong fundamentals despite a contraction in gross domestic product in the first quarter. Nonfarm payrolls rose by 428,000 jobs last month, the Labor Department said in its closely watched employment report on Friday. Data for March was revised slightly lower to show 428,000 jobs added instead of 431,000 as previously reported.

The Federal Reserve is trying to tighten monetary policy to bring down inflation without tipping the economy into recession. The U.S. central bank on Wednesday raised its policy interest rate by half a percentage point, the biggest hike in 22 years, and said the Fed would begin trimming its bond holdings next month. It started raising rates in March. Fed Chair Jerome Powell told reporters that “the labor market is extremely tight, and inflation is much too high.”

Meanwhile, the unemployment rate held steady in April at 3.6%, or just a hair above February 2020’s level of 3.5% from before the pandemic. That, in turn, had been the lowest level for joblessness since 1969. And this came as the labor force participation rate unexpectedly dipped to 62.2% from March’s 62.4%, suggesting a smaller share of the population was either employed or actively seeking work.