Week in FX Americas – December NFP Below Expectations But Unemployment Rate at 2008 Low

The Department of Labor released the Non Farm Payroll report this morning and took the market by surprise. Estimates by economists polled by Reuters and Bloomberg were expecting a range between an increase of 150,000 to 250,000. The published number was 74,000, well below the estimates.

The bad weather hitting the US has been blamed for the slowdown in job creation. It comes at a bad time for the Federal Reserve as they started their tapering based on the previous months strong employment numbers.

December’s NFP is the lowest since 2011. The unemployment rate declined to 6.7 percent which is the lowest since 2008, but it has more to do with people leaving the workforce than a true recovery in employment.

The November employment numbers were revised upward by 38,000 jobs, so there is some expectation that December number was under reported. The reality will be that even with revision it will be below the market analysts expectations which also hints at the perceived versus the reality of the US economic recovery. This puts the Fed in a tough spot as the tapering program has been started. Bern Bernanke was wise to leave Yellen and Co. plenty of wiggle room on when to taper and even add to the stimulus package. They will need it.


* GBP Core Consumer Price Index
* USD Advance Retail Sales
* AUD Unemployment Rate
* EUR Euro-Zone Consumer Price Index
* USD Consumer Price Index
* USD U. of Michigan Confidence

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza