The US Non-Farm Payrolls number for June came out a few minutes ago, and the headline number was much better than expected, with more than 200K new jobs added during the month. The whole report was a mixed bag, as wage growth was lower than the consensus estimate and the Unemployment rate also unexpectedly ticked higher, albeit from a decade-long low.
- 222,000 non-farm jobs added in June vs. the expected 175,000
- Wages grew by a monthly 0.2% compared to the expected growth of 0.3%
- Unemployment came in at 4.4% vs. the expected 4.3%
Let’s see what the numbers could mean for the markets and the monetary policies of the Fed and the ECB.
The mixed numbers could add to the worries that the Federal Reserve voiced recently although we don’t expect a change in the interest rate policy of the bank because of it. Still, the soft wage growth will put more pressure on retail sales and consumer spending in general and will add to the downward pressure on the CPI, and ultimately the Dollar. We expect the long-term weakening trend of the Dollar to continue, and stocks to trade sideways at best, as the momentum of the economic growth slows further. The initial reaction of the all important Euro/USD pair reflects the mixed report with a slightly negative tilt for the Dollar.
EUR/USD, 5-minute Chart
Unemployment Rate, Long-Term Graph
Non-Farm Payrolls Since the end of the Crisis
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