The US dollar is weakening against some of its counterparts midweek, despite several bullish indicators to suggest the economy is still strong. The labor market remains healthy, wages are climbing, and business confidence continues to jump. The greenback might be taking a breather after rallying earlier this week.
According to ADP, the US private sector created 227,000 new jobs, beating market forecasts of 1780,000. The ADP also revised its September total for jobs from 230,000 to 218,000. The biggest gains were found in large businesses, trade, and hospitality.
This report comes just before the Department of Labor releases its October employment numbers on Friday. Economists anticipate 202,000 new jobs and a 3.7 jobless rate.
The Labor Department did confirm that wages and salaries surged 3.1% in the third quarter, the largest quarterly boost in a decade. Wages and salaries rose 0.9%, benefit costs jumped 0.4%, and the overall compensation costs edged up 2.8%, beating market forecasts.
Sentiment regarding the national economy and overall business outlook among business owners remains quite high. According to the latest Paychex Business Sentiment report, corporate leaders are bullish on economic confidence, access to capital, regulations, capital investments, filling positions, and raising wages. The only concern business owners appear to have is locating new customers.
Martin Mucci, Paychex president and CEO, said in the report:
While the tight labor market is still making it difficult for some businesses to hire and retain qualified candidates, itâs encouraging to see that todayâs business owners arenât letting that impede their general outlook or ability to grow.
It will be interesting to see what impact the consistent level of optimism plays in the midterm elections.
The US Dollar Index tacked on 0.14% to 97.14, the highest it has been in 16 months. Year-to-date, the greenback has rallied nearly 6%.
The USD/CAD currency pair increased 0.43% to 1.3169, from an opening of 1.3112, at 18:01 GMT on Wednesday. The EUR/USD rose 0.27% to 1.1347, from an opening of 1.1316.
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