As you know, nonfarm payrolls and the recession are always closely related. The U.S. Federal Reserve sees its main goal as reducing inflation to an acceptable 2%. The U.S. central bank has already increased its key prime rate by 0.75% in July to meet this target.

It is also worth keeping in mind that speculations that the U.S. monetary regulator may raise interest rates less aggressively in the coming months began to grow in the market in mid-July. How August’s non-farm payrolls will perform is a matter of speculation for now. 

The resilience of the economy is most visible in the labor market. The July NonFarm Payrolls report confirmed that the recent Fed rate hikes have not put downward pressure on the number of new job openings in the U.S.

Non-farm payrolls in July were much better than forecasted (250K) and much higher than the previous 398K (revised upward). And total employment (nonfarm payrolls) is up 22.0 million since hitting a low in April 2020 and back to pre-pandemic levels.

In other upbeat news, the U.S. unemployment rate fell to its lowest level since February 2020. The figure fell from 3.6% in the previous period to 3.5% in July 2022, and the number of unemployed fell to 5.7 million.

As for wages, their average hourly wage also rose 0.5% to $32.27 in July. But this could complicate the Fed’s efforts to restore price stability and curb burning inflation.

The greenback began to weaken in mid-July, when markets thought the Fed might loosen its rate policy. The dollar could recoup some of its losses and move into consolidation in anticipation of labor market data. Most of the growth factors remain in place and there is no threat of a recession on the horizon for the U.S. economy. This could help stabilize risk appetite in the near term. On the other hand, good labor market news is a positive for the dollar. Therefore, the U.S. dollar ended the week higher and could move even higher on the July trading chart going forward.