Disappointing Jobs Data Sour Mood

by Marc Chandler

US employment data is wholly disappointing. Job creation much less than expected, unemployment rate jumps, hourly earnings flat and work week flat. The back month revisions pale in comparison to the disappointment. The market expected a 150k increase in jobs and increase got 39k. Private sector was to add 160k and only added 50k. Manufacturing was expected to add jobs, but it shed them again. This time by 13k. Unemployment jumped up to 9.8% from 9.6%. Hourly earnings did not increase. Nor did the work week. There is really very little good in this report. It break the streak of stronger than expected US data and is very disappointing. In terms of dollar implications, it is negative and it coupled with the ECB’s efforts to stabilize the sovereign bond market in Europe (the so called transmission mechanism), the euro is likely to continue to recover from the month long slide in Nov. The decline in US rates will also weigh on the greenback not just against the euro but against the yen as well.