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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:  Is the Fed really going raise rates after this disaster NFP?

May 2017 NFP Data (updated)

  • Non-Farm Payrolls:  138K  (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: -66K  (-6K  last time).
  • Participation Rate: only 62.7%  (62.9% last month )
  • Unemployment Rate: 4.3%  (exp.4.4%,  last month 4.4%)
  • Private Sector: only 147K  (ADP showed 253K).
  • Real Unemployment Rate (U-6): 8.6%  (previous: 8.6%).
  • Employment to population ratio: only 60%  (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.  

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