US non-farm payrolls August 23

Although non-farm payrolls came in slightly above expectations of 170k in August, markets won't be too worried. That's because the more important metric that directly determines inflation — average hourly earnings growth — came in lower than expected, at 4.3%. To complement this, the unemployment rate, which has been stubbornly sticky since the Fed began hiking rates, is finally ticking up meaningfully. As such, it's no surprise to see markets reacting favourably to the data. All three US futures indices are firmly in the green. With Jerome Powell not wanting to risk a hard landing, the 0.3% jump in the unemployment rate along with the 0.4% jump to 7.1% in the U-6 unemployment rate (people who want to work but have given up searching) should give him enough reason to call an end to rate hikes at the Fed's next meeting. Markets are now pricing in a solid 91% chance that the Fed is done hiking, with cuts coming as soon as May 2023. This could impact rate policy across the pond in the UK.