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Big positive surprise beats  already high expectations: +288K and the unemployment rate falls to 6.3%. Best since January 2012. Yet the participation rate fell to 62.8%.The US was expected to report a gain of 215K jobs in April after +192K in March (before revisions). The unemployment rate was expected to stand at 6.6% after 6.7% beforehand. Expectations were at the highest since 2006, excluding the census period of 2010. April is the first full month of spring, when no adverse weather effects were recorded. The headline figure grabs attention.

Before the publication, EUR/USD traded around 1.3860, GBP/USD: 1.6860, USD/JPY: 102.50, AUD/USD: 0.9250, NZD/USD: 0.8650 and USD/CAD: 1.0960 . The US dollar rises across the board with EUR/USD down  under 1.3830, GBP/USD under 1.6850 and USD/JPY breaks to 102.80. – many updates coming —

 Data (updated)

  • Non-Farm Payrolls:  288K  (exp. +215K.  March: 192K  now revised to +203K)
  • Participation Rate: 62.8%  (63.2% last month )
  • Unemployment Rate:  6.3%, (exp. 6.6%, March: 6.7% before revisions)
  • Revisions:   36K: +25K for February and +11K for March  (+37K last month)
  • Private Sector NFP:  273K  (ADP showed a gain of +220K jobs).
  • Real Unemployment Rate (U-6):  12.3  (previous: 12.7%).
  • Employment to population ratio:  58.9  (previous: 58.9%)
  • Average Hourly Earnings:  0% – this is worrying  (exp. +0.2%, March: 0%).
  • Average  workweek:  34.5  (exp. 34.5, March:  34.5 hours).

Market reaction and Analysis

Bigger picture:  NFP probably not doing the job for Draghi – 3 reasons

Quick analysis:

  • This is the kind of number Yellen and co. were waiting for: a true spring bounce after the harsh winter.
  • The big drop in the unemployment rate is countered by the participation rate, but the drop in the “real unemployment rate” to 12.3% is encouraging.
  • The drop in earnings, could lower inflation expectations

Market reactions:

  • EUR/USD falls to the 1.38-1.3830 range. The big uncertainty is Draghi’s dilemma.
  • GBP/USD is below 1.6840, but the break requires confirmation. The pound was hit by a miss in construction PMI.
  • USD/JPY is edging closer to 103, above the 102 to 1.02.74 range. Will the breakout be confirmed?
  • USD/CAD is getting closer to 1.10
  • AUD/USD is finding support at the round level of 0.92
  • NZD/USD is showing strength and clinging to 0.86.


Recent data  showed a clear  distinction between the weather hit Q1 which hardly had any growth and a “spring bounce” in Q1. Data such as the ADP NFP,  the ISM Manufacturing PMI and other  figures such as the Chicago PMI all created high hopes for this NFP release. Excluding the months of 2010 which were influenced by the national census, NFP expectations are the highest since 2006.

The Fed  just tapered for the fourth time this week and also  “blamed the weather” for the slowdown and saw a bounce. This NFP is expected to confirm the Fed policy.