FXStreet (Barcelona) – Economists at Nomura, highlight the key positive and negative points from the US labour market report yesterday, and further see the payrolls data as keeping the chances of a September Fed rate hike on the table.
Key Quotes
“June employment report is consistent with progress towards full employment, given the solid payroll growth, the drop in the unemployment rate, and improvement in broader measures of underutilization. Although, we have yet to see any acceleration in wage growth, based on recent Fed communications, a pickup in wages may not be needed for liftoff. On balance, this report does not suggest that the Fed will definitely hike rates in September, but it likely keeps a September rate hike on the table.”
Positives
“Retail employment showed another solid increase of 33k.
Education and health workers rose by a hefty 50k.
Temporary help workers, a leading indicator of a broad trend of job gains were up by 20k.
The unemployment rate declined by two-tenths to 5.3% from 5.5% in May.
U6, a broader measure of labor underutilization, declined by three-tenths of a percent to 10.5% from 10.8%, previously.
The share of part-time workers for economic reasons was down to 23.5% from 24.2%, previously.
Aggregate weekly hours continued to increase by 0.2% m-o-m, suggesting a continued growth in economic activity.”
Negatives
“Nonfarm payrolls increased by 223k, falling short of the market expectation of 233k.
Net revisions to prior months were a negative 60k.
The mining sector continued to shed employment (-4k), albeit at a slower pace than in prior months.
Construction employment was flat following two straight months of increases.
Average hourly earnings were unchanged with a downward revision to the previous month.
The average work week remained at 34.5 hours.
The labor force participation rate declined sharply by three-tenths of a percent to 62.6% from 62.9%.
The number of voluntary job leavers fell by 56k in June.”
(Market News Provided by FXstreet)