NFP Recap: US jobs miss but revisions redeem
James Chen, CMT November 3, 2017 10:33 AM
As it turns out, “only” 261,000 jobs were created in the month following September’s weather-related job disruptions, falling well below consensus estimates of around 310,000 and slightly below our target range of 270,000-300,000.
As we suspected prior to Friday morning’s US jobs release, the highly optimistic consensus expectation of over 300,000 jobs added in October made it easier to disappoint than would normally be the case. As it turns out, “only” 261,000 jobs were created in the month following September’s weather-related job disruptions, falling well below consensus estimates of around 310,000 and slightly below our target range of 270,000-300,000. Adding to the forecast disappointment, wage growth also fell short, with average hourly earnings remaining flat against expectations for 0.2% growth.
On the plus side, however, the unemployment rate fell to 4.1% against a prior consensus forecast of 4.2%. Additionally, September’s dismal -33,000 job loss initially reported last month was revised up to an 18,000 gain in jobs, and August was also revised up substantially, from 169,000 to 208,000. Together, these revisions added 90,000 more jobs than previously reported for August and September. With the revisions, the initial negative impact of the October miss was quickly ameliorated.
The knee-jerk reaction to Friday’s October headline and wage growth disappointments included a sharp, but brief, drop for the US dollar. As noted, however, when the more constructive aspects of the jobs report were digested, the dollar pared those losses and entered into positive territory on Friday morning. Overall, the jobs data showed continued strength in the US employment landscape. Coupled with high expectations for rising interest rates in December and into 2018 under the helm of newly-nominated Fed Chair Jerome Powell, as well as anticipation of impending tax and other fiscal reform, continued US job strength is likely to help support the dollar further in its recent recovery.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.