Job growth in the U.S. unexpectedly recorded a reading that exceeded expectations in January, this latest data left the market in a bit of a dilemma.
The Labor Department reported that the NFP reading rose by 517,000 through mid-month, abruptly bucking a four-month trend of slowing job gains. Analysts had instead expected growth of 187,000, which would be the slowest job growth in nearly two years.
December data was also revised to show a gain of 260,000 jobs, compared to the 223,000 originally reported.
The US dollar index jumped higher against the six major currencies by +0.75% to 102.340 after the NFP report was released. While stock futures fell as traders were forced to reassess bets that the economic slowdown would force the Federal Reserve to cut interest rates later this year.
The data underscores a tight labor market. The Fed has tried to cool the economy through monetary policy measures, including interest rate hikes. At the end of its latest meeting on Wednesday, the central bank raised rates by 25 basis points, but also said it was starting to see some slowdown in inflation.
