Another great employment report and some fairly easy pips
Skerdian Meta • 1 min read
The US employment report was just released and it was great. After the 38k new jobs that opened in May against 160k expected the forex market panicked, thinking that another slowdown was coming for the US economy. But last month and this month the employment report has been very strong, way above the expectations.
Now the fears have evaporated as if nothing happened and everything seems brighter once again. This is forex, one month everyone is calling for an apocalypse, the next everything is forgotten and we´re living in the happy land. Let´s have a look at these numbers. The non-farm employment (NFP) posted 255k against 180 expected. A good number for a sustainable economy and employment sector would be around 100-150k, so 255k is a great number.
The unemployment remained the same as in the previous month, but it missed the expectations by 0.1%. That said at 4.9% the unemployment rate is at or below the natural rate. Besides that, the 0.1% in the participation rate increased which kept the unemployment rate unchanged.
EUR/USD is about 100 pips down after the employment report
As we explained in our previous live market update, the most important data was the wages. The average hourly earnings picked up by 0.3% in July against 0.2% expected and 0.1% in June. This is a nice jump which shows that the US consumer is earning more, which will then translate into more spending. But, what´s more important about this piece of data is that it shows that there are more jobs available around, and the company profits are growing, so the US employers are being forced to increase the wages. USD jumped and our USD/JPY buy forex signal just hit take profit a while ago.