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The US gained 175K jobs in May. Official expectations stood on a gain of around 160K, but after a few weak figures, the real expectations were probably lowered. The unemployment rate was expected to remain unchanged at 7.5%, but it rose to 7.6%. With dollar shorts being so extreme, this small positive surprise certainly helps, at least in the initial reaction. And the initial reaction was only initial: the dollar now crashes. Update: and rises again. Markets are somewhat insane.

EUR/USD traded at around 1.3260 and USD/JPY around 95.70 prior to the publication. Volatility was mad, especially in the yen, after the dollar crashed yesterday. The dollar is now on the rise

EUR/USD is flirting with 1.32, USD/JPY dropped under 95 only to jump to 96.60, and other currencies follow the same patterns.

The Details

  • Non-Farm Payrolls: +175K
  • Participation Rate: 63.4% – up from the historic low(63.3% last month)
  • Unemployment Rate: 7.6%    (last month 7.5% before revisions)
  • Revisions:  – 16K in April, +4K for March – a total of only -12K,  Last month saw huge revisions of +114K.
  • Private Sector NFP: +178K  (Last month:+73K, ADP showed +135K, a gap of 53K)
  • Real Unemployment Rate (U-6): 13.8%  (previous: 13.9%)
  • Employment to population ratio: TBA    (previous: 58.6%)
  • Average Hourly Earnings:  0% instead of +0.2%.
  • Average  workweek:  34.5  (Last month:  34.4 hours).

All in all, this is an OK report: OK job gains, the rise in the unemployment rate balanced with a rise in the participation rate and hardly any revisions, contrary to previous months.

Contrary to the stable, expected report, the market is mad. It is opportunity for dollar bulls to make a comeback after being beaten. The general feeling is that “it could have been worse”, and that the sigh of relief is a bit strong.


Jobs are becoming even more important than earlier, as they are the key for defining the tapering of QE: the slowing down of bond buys. There is little doubt that the next move will be tapering, but there is uncertainty about the timing.

Weak data in recent days triggered a dollar collapse on lower tapering expectations.