NFP Analysis and Talking Points
- US Nonfarm Payrolls rose by 75k in May, missing expectations of 185k expected; Prior month revised Lower
- US Average Hourly Earnings falls short of consensus
- Markets Raise Bets of Federal Reserve Rate Cut
See our latest Q4 FX forecast to learn what will drive the currency through the quarter.
DATA RECAP
US NFP 75k vs. Exp. 185k (Prev. 263k, Rev. 224)
Unemployment Rate 3.6% Exp. 3.6% (Prev. 3.6%)
Average Earnings M/M 0.2% Exp. 0.3% (Prev. 0.2%)
Average Earnings Y/Y 3.1% Exp. 3.2% (Prev. 3.2%)
NFP Report Review
US Bureau of Labor Statistics reported total nonfarm payroll (NFP) employment expanded by a 75k jobs in May, missing expectations of 185k. Alongside this, the headline figure for the prior month saw a downward revision to 224k from 263k, while the unemployment rate remained at the 3.6%.
Wage Growth Eases
The Fed focussed wage data missed analyst estimates with the monthly reading showing a 0.2% rise vs Exp. 0.3%, which took the yearly rate to 3.1%. Overall, the disappointing report will further fuel expectations that the Federal Reserve will be cutting interest rates in the near-term.
Market Response
The soft jobs reports saw a weaker US Dollar across the board, while US Treasury yields also edged lower. Consequently, gold prices have pushed higher with the precious metal hovering around 2019 highs as markets raise bets of a Fed rate cut.
USD Price Chart: 1-minute time frame (Intra-day)
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
