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Non-Farm Payrolls Only 138K, Wages Stuck At 2.5% – USD Crashes

By Kurt Osterberg · On June 2, 2017

A disappointing US jobs report on all fronts: only 138K jobs gained and wages are up 0.2% as expected but with a downwards revision. Year over year, salaries are stuck at 2.5%. The unemployment rate is down to 4.3% but the participation rate also falls to 62.7%. Revisions are negative but so is the real unemployment rate.

All in all, the big miss in jobs is compounded by static wages at 2.5%. The US is falling sharply across the board on this terrible jobs report.

May 2017 NFP Data (updated)

Non-Farm Payrolls: 138K (exp. +186K last 211K before revisions)

Average Hourly Earnings 0.2% m/m, 2.5% y/y (exp. +0.2% m/m, 2.6% y/y, last month 0.3% m/m, 2.5% y/y)

Revisions: -66K (-6K last time).

Participation Rate: only 62.7% (62.9% last month )

Unemployment Rate: 4.3% (exp.4.4%, last month 4.4%)

Private Sector: only 147K (ADP showed 253K).

Real Unemployment Rate (U-6): 8.6% (previous: 8.6%).

Employment to population ratio: only 60% (previous: 60.2%)

Average workweek: 34.4 (last month: 34.2).

NFP Currency Reaction

EUR/USD traded around 1.1210, sticking to the range as tension mounts towards the ECB and the mood is positive. After the event, EUR/USD reaches new 7-month highs.

GBP/USD traded around1.2855. Every election poll matters, and it is weighing on the pound. Cable is now recovering, reaching 1.2880.

USD/JPY was trading around 111.50, stable and waiting for the NFP. The pair slips under 111.

USD/CAD was around 1.3525. Despite strong Canadian GDP, oil prices are falling and have the upper hand. The pair is challenging 1.35 after the publication.

AUD/USD is around 0.7390, still suffering from Chinese data. AUD/UDS recovers above 0.74.

All in all, the dollar is weaker.

More: FOMC reactions – banks see June hike – are they correct?

NFP Background