The dollar slumped after the disappointing jobs report, where NFP missed the mark, earnings rose less than expected, hours worked shrank, and the unemployment rate ticked up. EURUSD spiked to near 1.1980, from 1.1915, as USDJPY slid from 110.05 to 109.55. USDCAD printed better than two-year lows of 1.2340, falling nearly 100 points after the data.
U.S. nonfarm payrolls increased a disappointing 156k in August following a downwardly revised 189k climb in July (was 209k) and a 210k gain in June (revised from 231k). That leaves the 3-month average at 185k. The unemployment rate edged up to 4.4% versus 4.3% previously. Average hourly earnings rose a mere 0.1% from August’s 0.1% (revised down from 0.3%). The workweek fell to 34.4 from 34.5. The labor force rose 77k after the 349k jump in August, with household employment falling 74k versus the prior 345k pop. The labor force participation rate was steady at 62.9%. For details on employment, private sector jobs rose 165k (ADP was up 237k), with the goods producing sector adding 70k. Construction jobs increased 28k, with manufacturing up 36k. The service sector added 95k. Government employment declined 9k. The report disappointed on nearly every metric, even though job gains were broad-based. Note that September is often notoriously volatile due to seasonal factors. Nevertheless, the report will further trim expectations for a Fed rate hike this year, even though there’s a lot of time between now and December’s FOMC meeting on the 12th and 13th.
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