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US President Joe Biden

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In the USA, wage growth accelerated noticeably at the beginning of the year. Average hourly wages increased by 0.6 percent from December to January, according to the US Department of Labor in Washington. Analysts had expected an increase of 0.3 percent on average. In the previous month, wages rose by 0.4 percent.

Wage inflation also increased year-on-year. In this view, the increase was 4.5 percent. The previous month's rate was revised from 4.1 to 4.3 percent.

The US labor market also developed very strongly at the beginning of the year:

  • The job growth was significantly stronger than expected. Wage growth also picked up noticeably.

  • Unemployment stagnated at a low level: 3.7 percent. This is a low value in a long-term comparison. It is not far from the low since 1969 of 3.4 percent, which was marked a year ago. The ministry now estimates the total number of unemployed to be around 6.1 million. That is also a rather low number.

  • Nonfarm payrolls rose by 353,000 jobs in January. It is the strongest increase in a year. Analysts on average had expected a much smaller increase of 185,000 new jobs.

  • In addition, the increase in employment in the previous two months was revised upwards by a total of 126,000. Corrections to preliminary statistical values ​​are normal. What is special is that the correction is so pronounced.

However, the development brings with it some challenges for the US Federal Reserve Bank, because a robust job market with rising wages suggests additional inflation risks. “Against this background, the probability that the US Federal Reserve will initiate a change in key interest rates at its next meeting in March drops to zero,” says analyst Elmar Völker from Landesbank Baden-Württemberg. However, the numbers are impressive evidence of a robust labor market.

On Wednesday, the Federal Reserve kept its key interest rates stable, as generally expected, and dampened expectations of imminent interest rate cuts. Fed chief Jerome Powell had said that more confidence was needed that inflation would decline sustainably. He described monetary policy easing as early as March as unlikely. Rather, the central bank will probably initiate the interest rate turnaround “at some point” this year.

Powell's words had already caused disillusionment on the markets. However, the market reactions to the current jobs report were much stronger: the US dollar rose sharply against many currencies, while the euro lost almost a cent in return. Capital market interest rates rose significantly - a sign that the markets are no longer expecting rapid interest rate cuts. The stock markets therefore reacted negatively.

mamk/dpa-AFX