NFP: 222K jobs but wages still stuck at 2.5% y/y

The US economy gained no less than 222K jobs in June, better than expected. However, wages rise by only 0.2% and with a downwards revision. Year over year, it’s only 2.5%, stuck once again. The unemployment rate is up to 4.4% with a rise in participation as well to 62.8%. Upwards revisions are significant: 47K. All in all, many jobs gained, wages remain stuck.

The US dollar initially rose but is now falling across the board.

— more coming

June 2017 NFP Data (updated)

• Non-Farm Payrolls:  222K  (exp. +175K last 138K before revisions)
• Average Hourly Earnings 0.2% m/m and 2.5% y/y (exp. +0.3% m/m, 2.6% y/y, last month 0.2% m/m, 2.5% y/y)
• Revisions: +47K  (-66K  last time).
• Participation Rate: 62.8%  (62.7% last month )
• Unemployment Rate: 4.4%  (exp.4.3%, last month 4.3%)
• Private Sector: 187K  (ADP showed 158K).
• Real Unemployment Rate (U-6): 8.6%  (previous: 8.6%).
• Employment to population ratio: 8.6% (previous: 60%)
• Average workweek: 34.5 (last month: 34.4).

NFP Currency Reaction

• EUR/USD traded around 1.1420, helped by the upbeat ECB minutes. The pair dropped initially to 1.1385 before reaching a high of 1.1440 and stabilizing.
• GBP/USD was under 1.29 after weak UK data: trade, manufacturing, and housing all disappointed in the UK. Pound/dollar recaptured the 1.29 level and reaches out to 1.2915.
• USD/JPY continued riding higher along the uptrend support level, around 113.70. Dollar/yen is actually up to 113.80.
• USD/CAD traded around 1.2980, bouncing higher as oil prices slipped once again. Canada releases its own excellent jobs report at the same time. The pair slips to 1.29.
• AUD/USD is around 0.76. The RBA hit the Aussie earlier this week. It ticks up just a bit.

NFP Background

Indicators leading into the event were mixed: while soft data such as the ISM surveys were upbeat, ADP data was weak and all in all, inflation is weaker.

The Fed minutes showed a split board about the reduction of the balance sheet.

The US was expected to report a gain of around 180K jobs in June, with an unemployment rate of 4.3%. More importantly, wages carried expectations of 0.3% m/m after 0.2% last time. Y/y, wages rose by 2.5%, stuck.

NFP Preview: jobs distraction could be an opportunity to trade the wage data

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