U.S. Nonfarm Payrolls Rose 36K in January Amid Forecasts of 146K
Nonfarm payrolls in the world’s largest economy rose a mere 36K in January after climbing a revised 121K the month prior amid economists’ expectations of 146K. Meanwhile, the unemployment rate fell to 9.0 percent to mark the lowest level since April 2009. Indeed, there was a lackluster performance in the dollar as traders digest the report and its implications for the U.S. economy.
Winter conditions in the U.S. likely dampened the labor force as approximately 916,000 workers said that they did not attend work. Taking a look at the breakdown of the release, the labor force participation rate fell to 64.2 percent, while construction payrolls dipped 30K. The 26 year low in the labor force participation rate is worrisome due to the fact that those individuals not included in the labor force surged to 86.2 million from 83.9 million. Furthermore, hourly earnings pushed 0.35 percent higher to mark the largest gain since the end of 2008. It is also worth noting that the seasonally adjusted underemployment rate came in at 16.1 percent to post the lowest level since April 2009.
EURUSD Minute Chart
Source: FXCM’s Strategy Trader – Prepared by Michael Wright
Taking a look at the reaction subsequent to the dismal Nonfarm payrolls report, after the initial rally in the dollar, currency markets showed a lackluster performance. As the EURUSD holds its key support level at the 1.36 area, traders should not rule a slight reversal to the upside. Looking ahead, focus will now shift their focus to the European leaders meeting in Brussels as uncertainty surrounding the European Financial Stability Fund ability to purchase government bonds remain.
Written by Michael Wright, Currency Analyst
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Michael Wright is the author of FX Headlines, Fundamentals vs. Technical’s, Weekly Spotlight, and Forex Trading Weekly Forecast
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