A disappointing US jobs report on all fronts: only 138K jobs gained and wages are up 0.2% as expected but with a downwards revision. Year over year, salaries are stuck at 2.5%. The unemployment rate is down to 4.3% but the participation rate also falls to 62.7%. Revisions are negative but so is the real unemployment rate.
All in all, the big miss in jobs is compounded by static wages at 2.5%. The US is falling sharply across the board on this terrible jobs report.
Analysis:Â Is the Fed really going raise rates after this disaster NFP?
May 2017 NFP Data (updated)
- Non-Farm Payrolls: Â 138KÂ (exp. +186K last 211K before revisions)
- Average Hourly Earnings 0.2% m/m, 2.5% y/y (exp. +0.2% m/m, 2.6% y/y, last month 0.3% m/m, 2.5% y/y)
- Revisions: -66KÂ (-6K Â last time).
- Participation Rate: only 62.7%Â (62.9% last month )
- Unemployment Rate: 4.3% (exp.4.4%, last month 4.4%)
- Private Sector: only 147KÂ (ADP showed 253K).
- Real Unemployment Rate (U-6): 8.6%Â (previous: 8.6%).
- Employment to population ratio: only 60%Â (previous: 60.2%)
- Average workweek: 34.4 (last month: 34.2).
NFP Currency Reaction
- EUR/USD traded around 1.1210, sticking to the range as tension mounts towards the ECB and the mood is positive. After the event, EUR/USD reaches new 7-month highs.
- GBP/USD traded around1.2855. Every election poll matters, and it is weighing on the pound. Cable is now recovering, reaching 1.2880.
- USD/JPY was trading around 111.50, stable and waiting for the NFP. The pair slips under 111.
- USD/CAD was around 1.3525. Despite strong Canadian GDP, oil prices are falling and have the upper hand. The pair is challenging 1.35 after the publication.
- AUD/USD is around 0.7390, still suffering from Chinese data. AUD/UDS recovers above 0.74.
All in all, the dollar is weaker.Â
More: FOMC reactions – banks see June hike – are they correct?
NFP Background
The US was expected to report a gain of 286K jobs in May, with a stable unemployment rate of 4.4% and most importantly, wage growth of 0.2% m/m. Our preview: It’s all about the money – 3 scenarios for the NFP.  The data is critical for the Fed decision in 12 days time.
The dollar was tense ahead of the publication
