Official US jobs data for April came out substantially better than expected on Friday, indicating that the previous month’s dismal data (which became even more dismal through a revision on Friday’s release), may just have been an outlier in an otherwise positively trending US employment environment.
Total non-farm payroll employment for April was reported to have increased by 211,000 jobs, significantly greater than the ~190,000 jobs that were expected. April’s unemployment rate also improved by dropping down to 4.4%, the lowest in ten years, from the previous month’s 4.5% and against a prior forecast of 4.6%. Average hourly earnings came in as expected at +0.3%. Interestingly, however, while some had been expecting March’s disappointing 98,000 headline number to be revised upwards, the revision was actually to the downside. The previously reported 98,000 March jobs added was revised significantly down to an even more disappointing 79,000.
This positive showing for April should lend further to the Federal Reserve’s generally optimistic outlook for the US economy as touched upon in Wednesday’s FOMC statement, and bodes well for a likely and expected rate hike by the Fed in June. Of course, there is one more jobs report, for May, that will be released in early June prior to the next FOMC meeting and decision. That report will take on even greater significance with respect to the continuing strength in employment from the Fed’s perspective. Overall, Friday’s significant jobs beat places the US economy, and rate hike prospects, on better footing after recent lackluster economic data, especially with respect to weak GDP growth in the first quarter and March’s low job gains.
Despite a clearly positive and better-than-expected outcome for April jobs, however, the US dollar was unimpressed. In fact, after spiking very briefly, the greenback fell almost immediately against most of its major currency counterparts after the release. After this initial drop, the dollar stabilized once again but remained under modest pressure. Going forward, however, Friday’s positive news should help provide some support for the currently-struggling US dollar, especially if the prospect of a June rate hike by the Fed becomes increasingly likely.
Total non-farm payroll employment for April was reported to have increased by 211,000 jobs, significantly greater than the ~190,000 jobs that were expected. April’s unemployment rate also improved by dropping down to 4.4%, the lowest in ten years, from the previous month’s 4.5% and against a prior forecast of 4.6%. Average hourly earnings came in as expected at +0.3%. Interestingly, however, while some had been expecting March’s disappointing 98,000 headline number to be revised upwards, the revision was actually to the downside. The previously reported 98,000 March jobs added was revised significantly down to an even more disappointing 79,000.
This positive showing for April should lend further to the Federal Reserve’s generally optimistic outlook for the US economy as touched upon in Wednesday’s FOMC statement, and bodes well for a likely and expected rate hike by the Fed in June. Of course, there is one more jobs report, for May, that will be released in early June prior to the next FOMC meeting and decision. That report will take on even greater significance with respect to the continuing strength in employment from the Fed’s perspective. Overall, Friday’s significant jobs beat places the US economy, and rate hike prospects, on better footing after recent lackluster economic data, especially with respect to weak GDP growth in the first quarter and March’s low job gains.
Despite a clearly positive and better-than-expected outcome for April jobs, however, the US dollar was unimpressed. In fact, after spiking very briefly, the greenback fell almost immediately against most of its major currency counterparts after the release. After this initial drop, the dollar stabilized once again but remained under modest pressure. Going forward, however, Friday’s positive news should help provide some support for the currently-struggling US dollar, especially if the prospect of a June rate hike by the Fed becomes increasingly likely.
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