The expectations now were unchanged wage development on a monthly basis, while hourly wage growth on an annual basis was expected to decrease from 4.1 to 4.0 per cent.
“In light of strong ECI figures (labour costs) for the first quarter, it will be well received by the market if wage growth for April comes in lower than expected,” Handelsbanken announced before the figures.
Reactions in the markets
Following the employment figures, there is a marked effect in the exchange rate between the dollar and the Norwegian krone.
Half an hour before the figures, one dollar cost NOK 10.89. Subsequently, the krone strengthened against the dollar to NOK 10.82 per dollars.
The interest rate on the ten-year US government bond was at 4.555 at 14:00 Norwegian time. After the job figures, it is down around 2 per cent to 4,485.
Pointer higher than expected
Earlier this week, several figures from the US labor market have come in which signal a continued tight market.
The ADP Research Institute’s figures for private sector employment growth, previously regarded as an indicator of what the “non-farm payrolls” figures can show, on Wednesday showed job growth of 192,000 in April. This was well above the consensus of 175,000.
The JOLTS report on the same day showed 8.488 million job vacancies in March, the lowest level since February 2021 – and below consensus of 8.69 million.
Jobless claims figures on Thursday showed that 208,000 Americans applied for unemployment benefits last week, fewer than expected. The number continuing on social security was also lower than expected.
Figures from employment agency Challenger, Gray & Christmas also showed that in April, US-based companies announced plans to cut 64,789 positions, a decrease of 28 percent from the previous month. So far this year, American companies have announced cuts of 322,043 jobs, 4.6 percent fewer than in January–April last year.
“The labor market remains tight, but as labor costs continue to rise, businesses will be slower to hire and we expect further cuts will be necessary. This low April number could be the calm before the storm,” commented Andrew Challenger, director of Challenger, Gray & Christmas.
