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

The unemployment rate posted a surprising decline to 3.6% but the USD has turned lower now

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

• Last updated: Friday, May 3, 2019

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 US	Actual	Expected	Previous
Unemployment Rate	3.6%	3.8%	3.8%
Participation Rate	62.8%	63.0%	63.0%
Average Hourly Earnings MoM	0.2%	0.3%	0.1%
Average Hourly Earnings YoY	3.2%	3.3%	3.2%
Non-Farm Employment Change	263K	181K	189K
Goods Trade Balance	-$71.3B	-$73B	-$72B
U6 Underemployment	7.3%	7.3%	7.3%
Prelim Wholesale Inventories MoM	0.0%	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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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.