U.S Non-farm Payrolls Disappoint – Risk off, Dollar Down

• US Labor – Aug Nonfarm Payrolls +156K; Consensus +179K
• US Aug Unemployment Rate 4.4%; Consensus 4.3%
• US Aug Average Hourly Earnings +0.11%, or +$0.03 to $26.39; Over Year +2.5%
• US Aug Private Sector Payrolls +165K and Government Payrolls -9K
• US Aug Average Workweek -0.1 Hour to 34.4 Hours
• US Aug Labor-Force Participation Rate 62.9%
• US Jul Payrolls Revised to +189K; Jun Revised to +210K
• US Jul Unemployment Unrevised at 4.3%

August non-farm payrolls rose by a seasonally adjusted +156k m/m – the unemployment rate rose to +4.4% from +4.3%, though the level remains atop of historical lows.

For the Fed, wages maintained a modest growth rate.

Note: The data does not reflect any disruptions caused by Hurricane Harvey and related flooding in Texas.

Average hourly earnings for private-sector workers increased +3c last month to +$26.39 an hour. From a year earlier, wages rose +2.5%, consistent with their growth pace for most of this year.

The labor-force participation rate held steady at +62.9% in August.

Net result – the Fed will find it tough to sell another rate hike in 2017.

USD under pressure across the board (€1.1946, £1.2935, ¥109.70). U.S 10-year yields fall -2 bps to an intraday low for 2017 at +2.10% and gold prices rally +0.8% to +$1,1324.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell