The US employment data were in line with expectations. Non-farm payrolls rose by 217k. The unemployment rate was steady at 6.3%. Average hourly earnings rose 0.2%, and the year-over-year increase rose to 2.1% (2.0% is the 24-month average). The work week was unchanged at 34.5 hours. Households reported at 145k increase in jobs after 73k loss in April.
The jobs data is consistent with a strong rebound in the US economy here in Q2 of 3% more or less. Q1 GDP may still be revised lower. There are no policy implications stemming from today’s jobs report. There are two elements to note. First, the Fed will continue to taper at a $10 bln a meeting. Second, in recognition of the weakness in Q1 GDP, the Fed’s new GDP forecasts will likely to revise down this year’s growth. It is more of an accounting function that a reassessment of its view that the recovery will strengthen.
In contrast, Canada’s jobs data were disappointing. The unemployment rate ticked up even as the participation rate was unchanged. The economy grew 25.8k jobs in line with expectations, but these were all part-time jobs (54.9k) as full-time positions fell 29.1k. It is the first time since May-June 2009 that Canada shed full-time jobs two months in a row. The Canadian dollar is underperforming as a result.
US Treasuries have rallied, and this is helping cap the dollar against the yen. The euro and sterling have recovered consolidative losses seen prior to the jobs data. Technically, the euro and sterling are poised for further gains next week. The Aussie and Kiwi are also advancing. Note that the RBNZ is expected to hike rates next week.
Jobs Data Out of the Way, Euro Advance Continues
Reviewed by Marc Chandler
on
June 06, 2014
Rating:
Reviewed by Marc Chandler
on
June 06, 2014
Rating:
