US NFP data to show slowdown in job creation but strong wage growth ahead of polling day

Matthew Ryan, CFA Ebury

US growth surprised modestly to the downside in the third quarter of the year, according to data released on Wednesday. The economy posted annualised expansion of 2.8%, which was below the 3% estimate.

This is a very marginal miss, however, and the data remains consistent with a healthy economy that continues to be well supported by robust consumer spending and a resident labour market.

Today’s NFP data will almost certainly show a slowdown in net job creation in October, but wage growth is set to remain high at around 4% YoY. As mentioned, investors will be closely monitoring US election developments in the next few trading sessions, with Americans set to go to the polls on Tuesday.

Trump remains the front runner in the polls and prediction models, but his apparent advantage appears to have waned this week, and markets are back viewing the election as almost akin to a coin-toss.”

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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