The US economy gained 157K jobs in January, in line with expectations. The unemployment rate is now 7.9, a marginal disappointment. Early expectations stood on a gain of 161K jobs and an unemployment rate of 7.8%, like the report for December, which was now revised to the upside: +7.9%. There were huge revisions: +127K for November and December.
EUR/USD traded around 1.3650 and USD/JPY was above 92 before the publication. USD/JPY is a bit weaker and EUR/USD a bit higher, but the headline number seems to have caused a market stall. The revisions haven’t been digested by the markets
The details:
- Non-Farm Payrolls: +157K
- Participation Rate: 63.6%Â
- Unemployment Rate: 7.9%.
- Revisions: Huge: +127K
- Private Sector NFP: +165K (ADP showed a gain of 192K, above expectations)
- Real Unemployment Rate (U-6): Unchanged at 14.4%.
- Employment to population ratio: 58.6%
- Average Hourly Earnings: +0.2% as expected
As mentioned here and here, an improvement in job market encourages people to return to the job market and look for jobs – this in turn raises the work force and keeps the unemployment rate high.
Last month, the initial report showed a gain of 155K jobs and an unemployment rate of 7.8%, within expectations. Also other figures remained mostly unchanged. Job gains have been quite steady of late.
The fact that Non-Farm Payrolls are reported on the first day of the month made forecasting a big harder: the purchasing managers’ indices from ISM will be published only after the NFP (manufacturing today and services next week).
In the hours before the release, EUR/USD and USD/JPY continued their upwards move, with EUR/USD breaking above uptrend resistance. The strength of the euro, that seemed unstoppable resulted in thoughts that the NFP is a win-win situation for the euro.
