US jobs data marginally disappoints

The non-farm payrolls report from the US was broadly a let-down as the headline missed estimates.

US flag
Source: Bloomberg

June’s figures came in at 223,000, while the market was anticipating a reading of 233,000. To make matters worse, the May report was revised lower to 254,000 from 280,000. The unemployment rate dropped to 5.3% from 5.5% in May, but this is down to the decline in the participation rate from 62.9% to 62.6%. The message to take away from the report is that the US jobs market was a touch softer in June, but an interest rate hike by the Federal Reserve is still a reasonable possibility this year.

The Dow Jones and S&P 500 both pushed higher on the back of the announcement, but the move wasn’t massive. The FTSE 100 and DAX experienced a more muted reaction.

EUR/USD and GBP/USD are lower after the report, and given the unemployment number was assisted by the weaker participation rate, the dollar rally will be in for a correction.

Gold initially sold off, but it has regained its lost ground for now as traders realised the unemployment number wasn’t as strong as initially suspected.

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