Jobs Data Disappoints

The US employment data was disappointing. The key measure of private sector job creation was only 41k compared with expectations for 180k and a 3 month moving average of 155.6k. The fact that the unemployment rate ticked down is not really good news as the decline in unemployment was not a function of more jobs but a reflection of people leaving the work force.

There were two bright spots though that should not be discounted. The first is the hourly earnings rose 0.3%. This bodes well for income and therefore consumption. Also the work week increased by 0.1 which is roughly the equivalent in terms of output of a bit more than 300k workers.

The foreign exchange market is driven by European events today and there seems to have been only a modest reaction to the general disappointment with the US employment report. There has also been a bit of a clarification of the French PM comments. To be filled under lost in translation--the word parity and the French word for level sound similar (to the Anglo-American ear) and news wires have corrected it.