February 4, 2023

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June US non-farm payrolls 850 K vs 700k estimate

2 min read

I Non-farm payroll for June 2021

I _Non-farm payroll for June 2021
  • Prior was 559K
  • Unemployment rate 5.9%  vs 5.7% expected
  • Prior unemployment rate 5.8%. Pre-pandemic, the unemployment rate was at 3.5%
  • Participation rate 61.6% vs 61.6% last month. Pre-pandemic was 62.8%
  • Underemployment rate 9.8% vs 10.2% last month
  • Average hourly earnings 0.3% m/m vs +0.3% expected. Last month 0.5%
  • Average hourly earnings 3.6% y/y vs 3.7%% expected. Last month 2.0%
  • Average weekly hours  34.7. Last month 34.9
  • Two month net revision 
  • Change in private payrolls 662K vs +600K expected. Last month 492K
  • Change in manufacturing payrolls 15K vs +28K expected.
  • Part-time unemployment decreased by 644K to 4.6 million in June
  • The total number of unemployed persons remained little change that 9.5 million. Pre-pandemic the number of unemployed was at 5.7 million
  • Notable job gains occurred in leisure and hospitality, public
    and private education, professional and business services, retail trade, and
    other services.
  • In June, the number of long-term unemployed (those jobless for 27 weeks or more)
    increased by 233,000 to 4.0 million, following a decline of 431,000 in May. This
    measure is 2.9 million higher than in February 2020. These long-term unemployed
    accounted for 42.1 percent of the total unemployed in June.
  • Full report

Other details from the Labor department:

  • The labor force participation rate was unchanged at 61.6 percent in June and has
    remained within a narrow range of 61.4 percent to 61.7 percent since June 2020.
    The participation rate is 1.7 percentage points lower than in February 2020. The
    employment-population ratio, at 58.0 percent, was also unchanged in June but is
    up by 0.6 percentage point since December 2020. However, this measure is 3.1
    percentage points below its February 2020 level. (See table A-1.)

A breakdown of the components shows:

Goods producing jobs +20K

  • Manufacturing +20K
  • Construction -7K
  • Mining and logging +12 K

Service jobs +642K

  • Trade transportation and utilities +99K
  • information, +14K
  • Financial -1K
  • Professional and Business services, +72K
  • Education and health services +59K
  • Leisure and Hospitality, +343K
  • Other  +56K

Government +188K

  • Federal -5K
  • State +69K
  • Local+124K

Overall, some good and and not so good. 

  • The participation rate moved lower. 
  • Unemployment rate is higher . 
  • Earnings were in line with expectations and lower than last month’s. 
  • The nonfarm payroll number was obviously stronger than expectations. 

The stock market is higher post the report with the NASDAQ index up 77 points. The Dow up around 100 points and the S&P index up around 14 points.

After a initial move to the upside off of the nonfarm payroll number, the dollar has moved back to the downside. The EURUSD retraced its earlier declines and is down marginally still on the day. The GBPUSD is now higher.  The USDJPY is moving back to it’s levels before the report. 

US yields remain lower on the day. The 10 year yield is down -3.3 basis points to 1.4475%. It did trade as low as 1.454% and as high as 1.485% in trading before the report. 

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