4-week average for US ADP Employment Change declines to 18.50K

How did US private-sector job additions average 18.50K a week in early October?
Hiring continued to show the same loss of momentum.

Hiring momentum weakened in the US private sector in early October, with weekly job additions averaging 18.50K over the four weeks ending 3 October. The figures came from the NER Pulse, the weekly companion to the ADP National Employment Report.

Compared with the previous reading of 24.75K, the modest decline points to a further cooling in recruitment.

Why is the US Dollar under pressure?

TMGM Analysis: Financial Market News, Economic Calendar & Market Insights

Trading under pressure on Tuesday, the Greenback has slipped back below 102.00 as measured by the US Dollar Index (DXY). US Treasury yields are falling across the curve alongside the currency's decline, even as crude oil prices rise.

Employment: common questions

How does employment influence currency values?

As an important measure of economic health, labour market conditions play a major role in determining currency valuations. Strong employment, or low unemployment, supports consumer spending and, in turn, economic growth, helping strengthen the domestic currency. Inflation and monetary policy can also be affected when the labour market is particularly tight, meaning there are too few workers to fill available vacancies. In such conditions, strong demand for a limited supply of labour pushes wages higher.

Why do policymakers watch wage growth?

For policymakers, the rate of salary growth across an economy is a crucial consideration. When wages rise rapidly, households have more money available to spend, which typically pushes up consumer goods prices. Unlike more volatile inflation drivers, such as energy prices, wage growth is regarded as a major source of underlying, persistent inflation because salary increases are unlikely to be reversed. This is why central banks worldwide closely monitor wage growth figures when setting monetary policy.

What importance do central banks attach to employment?

A central bank's objectives determine how much emphasis it places on labour market conditions. For some, an explicit employment-related mandate sits alongside the responsibility to control inflation. For instance, the US Federal Reserve (Fed) has a dual mandate to promote maximum employment and stable prices, whereas the European Central Bank (ECB) has the sole mandate of keeping inflation under control. Whatever their specific mandates, policymakers consider labour market conditions important both as an indicator of economic health and because of their direct link to inflation.