Shockingly weak US job growth pushing USD down further
May 07, 2021 @ 17:16 +03:00
The US employment report shockingly shows an increase in employment of only 266K for April. This is around four times lower than average forecasts had suggested.
Manufacturing lost 18K jobs while construction kept the number of employees. The total private sector added 218K new jobs.
Total employment is now 8.2 million below its peak in February 2020. The reasons for such slow employment growth amid a boom in new jobs are probably due to early retirement, parents caring for children due to closed nurseries and schools, along with generous payments from the government.
The initial market reaction was classic: the dollar fell on renewed speculation that the Fed would not turn to policy tightening soon. The Nasdaq shot up as S&P and Dow Jones set new all-time highs due to lower bond yields. While the weakness in the dollar even after the report is understandable, the “the worse, the better” reaction in equities risks being not so sustained.
The FxPro Analyst Team