The much awaited key US jobs report, the Non-Farm Payroll report (NFP) disappointed today, with fewer than expected jobs created making a small dent in the high US unemployment rate. The European debt crisis and upcoming and the Fed’s dim growth outlook kept employers from hiring more workers on these concerns.
The US labour market added 80,000 jobs in the non-farm sectors, which was much less than what economists had forecast for 95,000 jobs. September’s 103,000 figure was revised up to 158,000.
The persistent weakness of the labour market was highlighted in the country’s unemployment rate, which is obtained from a separate household survey, and fell only marginally to 9.0% from 9.1% in September.
The jobs market remains weak more than two years after the deep recession of 2008 and 2009 ended and it remains vulnerable to shocks, particularly from Europe’s ongoing financial crisis.
Although it must be noted that after almost grinding to a halt in the first half of the year, the US economy has been picking up some speed in recent months.
“The headline (jobs) number was clearly a slight disappointment, but when you delve into it a bit deeper and look at the other elements of the report, I think this is probably consistent with some of the recent data which points to moderate improvement in U.S. economic activity,” says Nick Bennenbroek, head of currency strategy at Wells Fargo in New York.
“The latest (jobs) data is strong enough that it will kill off thoughts of a QE3 Xmas present for global markets, even if a dovish Bernanke-Yellen-Dudley triumvirate will have left hopes alive for H12012 on any loss of momentum,” Alan Ruskin, global head of G10 FX strategy at Deutsche Bank, writes in a note to clients. He refers to the recent debate on whether the U.S. central bank will engage in a third round of quantitative easing to boost the U.S. economy.
Immediately after the NFP report was released, the dollar fell against the euro as an initial knee jerk reaction but this was short-lived and the dollar soon rebounded. EURUSD jumped from 1.3825 to 1.3866 then back down to 1.3804 within minutes of the data.