In recent weeks, the U.S. dollar has performed relatively well, remaining stable (aside from some dips during trading hours) from one week to the next. As a result, the dollar index peaked last month, reaching a level of 104.45 on 25 August.
U.S. labour market struggles to stay above water
Friday marked a seven-week consecutive rise for the dollar index in comparison with its figures of 99.58 from the same period year-over-year. Industry experts suggest that this favourable standing is set to last, at least for the short-term.
Friday also brought about data showing the slowdown of U.S. employment and wage growth which was greater than originally expected. The Federal Reserve is expected to keep interest rates at the same level throughout September as a result. The report revealed that only 150,000 jobs were created each month for the past 3 months; compared to the first 5 months of this year which each averaged 287,000 jobs, this figure offers a sliver of hope that the labour market is settling and the demand for workers is softening – people are remaining in their jobs, thus interest rates, for the short-term, are stable.
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That being said, data from the household survey detailed a 514,000 increase in unemployed people during the last 3 months, with unemployment rising from 3.4% in January to 3.8% in August. Wage growth for August also slowed to 0.2% after a couple of stronger months.
The data surrounding the dollar index and the household survey shows that, despite global economic turmoil, the U.S. market is managing to balance itself and, in turn, delaying the projected aggressive interest fluctuations that the Federal Reserve has in store for 2024.
