U.S. nonfarm payrolls rose 209k in July with earnings rising 0.3%. The June 222k job gain was revised up to 231k, but May’s 152k increase was bumped down to 145. There was no revision to June’s 0.2% earnings rise. The unemployment rate was dipped to 4.3% versus 4.4%. The labor force jumped 349k following the prior 361k gain, while household employment increased 345k from 245k. The labor force participation rate rose to 62.9% from 62.8%. The workweek was steady at 34.5. Total private payrolls increased 205k (beating ADP’s 178k). The goods producing sector added 22k workers, with construction up 6k, and manufacturing up 16k. Jobs in the services sector increased 183k, with the 62k gain in leisure/hospitality leading the way. Education/healthcare gains were up 54k, while business services added 49k. Government jobs rose 4k, with the Federal sector unchanged. This is another solid report and keeps the Fed on its normalization path, but doesn’t necessarily imply a September rate hike.
The dollar rallied broadly following the data, where NFP rose 207k in July, better than consensus, and hourly earnings rose an in-line 0.3%, while the June trade deficit narrowed more than market expectations. EURUSD slid to 1.1825 from 1.1870, as USDJPY charged up to 110.73 from near 110.05. Equity futures edged higher, while yields pushed higher too. The longer term question is can the USD holds these gains following many months of weak sentiment and a weakening Greenback.
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