EURUSD, H1
US nonfarm payrolls bounced 49,000 in January, recovering slightly from the -227,000 (was -140,000) drop in December, which was the first decline since April. While the headline was a little disappointing, some of the other components weren’t too bad. The unemployment rate dropped to 6.3% from 6.7%. Average hourly earnings edged up 0.2% following the 1.0% (was 0.8%) jump. On a 12-month basis, earnings are up 5.4% y/y from 5.1% y/y. The average work week climbed to 35.0 from 34.7. The labor force dropped -406,000 versus the prior 31,000 rebound, and household employment rose 201,000 versus 21,000 previously. The labor force participation rate dipped to 61.4% from 61.5%. Total private payrolls were up only 6,000 following the -204,000 (was -95,000) drop. The service sector added 10,000 jobs, barely recovering from the -280,000 (was -188,000) plunge in December. Leisure and hospitality jobs declined another -61,000 versus -536,000 (was -498,000). Employment in the goods producing sector dipped -4,000. Construction jobs were down -3,000 from 51,000 (was 51,000). Manufacturing lost -10,000. Government jobs bounced 43,000 from -23,000 (was -45,000).
The US trade deficit narrowed -3.5% to -$66.6 bln in December following the 8.2% surge to -$69.0 bln (was -$68.1 bln) in November which was a record high. The Dollar fell following the data, which saw January non-farm payrolls rise a bit less than consensus, but it was the sharply lower December revision that did the damage. The unemployment rate unexpectedly fell to 6.3% from 6.7%. The December trade deficit narrowed less than forecasts, with the November deficit revised higher. USDJPY fell from trend highs of 105.77 to 105.45, while EURUSD rallied from 1.1985 to 1.2023 and GBPUSD spiked to 1.3718.
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Stuart Cowell
Head Market Analyst
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