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.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.