We expect the labor market to continue to worsen. Two back to back month of job losses is still nothing compared to the 15 consecutive months of negative job losses between 2001 and 2002.
The dollar sold off against the Japanese Yen, but held steady against the Euro because the most immediate implication of this number is risk aversion. Carry trades have all sold off in anticipation of a weak Dow open.
Job losses were seen in nearly every sector aside from travel, government and the health care system. Excluding the public sector, private sector jobs actually dropped 101k. Meanwhile the unemployment rate fell to 4.8 percent as more people gave up looking for jobs. Average weekly hours and wages both remained unchanged from the prior month.
Looking ahead, we expect further dollar weakness as the weak labor market will force the Fed to bring rates down to as low as 1.5 percent. One other thing, the retail sector also shed jobs, which signals that retail sales in February could be negative as well.
By Kathy Lien, Chief Strategist of DailyFX.com
DailyFX provides forex news on the economic reports and political events that influence the currency market.
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