THE TAKEAWAY: [U.S. companies added more workers than expected in July] > [Dip in hiring suggests businesses remain wary] > [USDJPY bullish]
U.S. companies added more workers than forecast to their payroll in July, though hiring had cooled slightly from the previous month. According to ADP Employer Services, private employment increased by 163,000 in July, which follows a revised 172,000 gain in June that was slightly smaller than initially estimated. The median estimate of 38 economists surveyed by Bloomberg News had called for a 120,000 increase in July. Despite beating expectations, last month’s dip in employment gains serves as a reminder that the labor market will take time to strengthen.
The slowing pace of job growth suggests that businesses remain wary of hiring more employees until they see more evidence of a pickup in consumer spending. The slow labor market is likely to persist as the slowdown in global economies continues to dampen demand for U.S. goods.
USDJPY 1-minute Chart: August 1, 2012
Chart created using Market Scope – Prepared by Tzu-Wen Chen
In the minutes after release of the ADP report, the U.S. dollar jumped against the yen on the back of the better-than-expected employment figures. At the time this report was written, the USDJPY continued to trade higher at 78.16 yen.
--- Written by Tzu-Wen Chen, DailyFX Research
