US Employment Report Looks Bad But It’s Good

The US unemployment rate jumped 2 points higher but the employment report was much better that the headline.

Skerdian Meta•Friday, January 4, 2019•1 min read

The US employment report was released a while ago while I was posting the European session forex brief. We covered it live on our forex calendar if you want to go and have a look at it. At first glance, it looked pretty bad as the unemployment rate jumped two points higher to 3.9% from 3.7% previously.

But if you look at the details of this report where the devil hides, things are not that bad. Instead, this report was pretty good. Earnings jumped by 0.4% in December while non-farm employment change surged 312k higher, against 179k expected. Let’s see all the numbers in the table below:

	Actual	Expected	Previous
Unemployment Rate	3.9%	3.7%	3.7%
Participation Rate	63.1%	62.9%	62.9%
Non-Farm Employment Change	312k	179k	155k
Average Hourly Earnings MoM	0.4%	0.3%	0.2%
Average Hourly Earnings YoY	3.2%	3.0%	3.0%

As you can see, all the numbers are higher against expectations. A higher number is not good for the unemployment rate, but the participation rate also increased two points higher from 62.9% previously to 63.1%. A higher number of people filing for unemployment has affected the unemployment rate which also increased by 2 points.

Average hourly earnings increased by 0.4% in December which is the biggest monthly increase for this year together with the increase in August. The YoY average earnings also increased to 3.2% form 3.0% previously. Non farm employment change surged higher by 312k. Although, yesterday’s jump in ADP employment gave the market a hint for today’s main employment figures. So, it is a positive report overall and the USD has reversed to bullish now.

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.