Unemployment Falls in US but USD Turns Bearish As Markets Concentrate More on Earnings

Posted Friday, May 3, 2019 by
Skerdian Meta • 1 min read

The employment report from the US was released a while ago and it looked good at first glance. Although not as great if you look into details which include average earnings, the participation rate and the non-farm employment change, it is still a positive report on my opinion, but the markets seems more concentrated on earnings. Below are the figures for the details of the employment report:


Economic Data USActualExpectedPrevious
Unemployment Rate3.6%3.8%3.8%
Participation Rate62.8%63.0%63.0%
Average Hourly Earnings MoM0.2%0.3%0.1%
Average Hourly Earnings YoY3.2%3.3%3.2%
Non-Farm Employment Change263K181K189K
Goods Trade Balance-$71.3B-$73B-$72B
U6 Underemployment7.3%7.3%7.3%
Prelim Wholesale Inventories MoM0.0%0.2%0.2%


As you can see unemployment rate fell unexpectedly but that probably came from lower participation rate which also declined by two points. Employment jumped higher and inventories fell flat which means that firms will purchase more in the coming weeks. But lower inventories also means no help for the GDP report for Q2.

Both, the lower participation rate and the flat inventories balance the positive effects of the lower unemployment rate and the increased factory orders in coming weeks. Besides that, the monthly and yearly average earnings missed expectations. So, the USD has reversed lower now, but a 0.2% increase is not too bad in my opinion.

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