– Headline jobs growth comes in at +196K, and wage growth came in weaker at +3.2% y/y.
– The unemployment rate (U3) held at 3.8%, and the labor force participation rate fell to 63% from 63.2%.
– The US Dollar initially fell as the softer wage component and weaker labor force participation numbers undercut the better than expected headline figure.
The March US Nonfarm Payrolls report comes in as another piece of evidence that the US economy didn’t grind to a halt in Q1’19. Before today’s jobs data were released, the Atlanta Fed GDPNow growth tracker was looking for 2.1% annualized growth, up from 0.2% earlier in March.
After the incredibly dismal February US jobs report, likely influenced by the US government shutdown through January 25, market participants were somewhat nervous that a lack of a rebound in the labor market would confirm the rationale the Federal Reserve employed to pull back rate expectations for 2019.
The headline March US NFP printed at 196K, beating the initial Bloomberg News consensus forecast of 170K. But there was no significant give back in the February revision, which may have dampened the initial bullish reaction by the US Dollar. After coming in at 20K, the revised figure was only 33K. Another soft aspect of the report was the labor force participation rate, which unexpectedly declined.
Otherwise, outside of the solid topline readings for jobs growth and the unemployment rate, the wage component disappointed which may helped constrain any bullish US Dollar price action. At 3.2%, average hourly earnings have just come off of a 10-year high.
US ECONOMIC DATA SUMMARY
Here are the data driving the US Dollar this morning:
– USD Unemployment Rate (MAR): 3.8% as expected, unch.
– USD Change in Nonfarm Payrolls (MAR): 196K versus 170K expected, from 33K (revised higher from 20K).
– USD Labor Force Participation Rate (MAR): 63% from 63.2%.
– USD Average Hourly Earnings (MAR): 3.2% versus 3.4% expected, from 3.4% (y/y).
DXY Index Price Chart: 1-minute Timeframe (Intraday April 5, 2019)
Following the US jobs report release today, the DXY Index initially fell from 97.26 to as low as 97.22 thereafter. At the time this report was written, the DXY Index was grinding back to the topside, trading in at 97.36.
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— Written by Christopher Vecchio, CFA, Senior Currency Strategist
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