Non-Farm Payrolls 156K For August 2017; Wages +2.5% Y/y — USD Slides

Lower than expected data in the US: only 156K jobs were gained and wages went up by 0.1%, lower than expected on both fronts. The participation rate was unchanged at 62.9%. Wages y/y are still at an annual pace of 2.5%. Overall, not a great report on both wages and headlines growth in jobs.

The US dollar is reacting to this news as its slides against the majors including the Euro and Yen — the dollar weakness returns.

Expectations: The US was expected to report a gain of around 180K jobs in August after 209K in July (before revisions). Wages were expected to rise 0.2% after 0.3% and they remain key. This jobs report has all the ingredients of providing action. See: Why this NFP could be very volatile – 5 reasons

August 2017 NFP Data (updated)

Non-Farm Payrolls: 156K (exp. +180K last 209K before revisions)

Average Hourly Earnings 0.1% (exp. +0.2% m/m, last month 0.3% m/m, 2.5% y/y)

Revisions: -41K(+2K last time).

Participation Rate: 62.9% (62.9% last month )

Unemployment Rate: TBA (exp.4.3%, last month 4.3%)

Private Sector: 77K (ADP showed 237K).

Real Unemployment Rate (U-6): 8.6%(previous: 8.6%).

Employment to population ratio: 60.1% (previous: 60.2%)

Average workweek: 34.4 (last month: 34.5).

NFP Currency Reaction

The US dollar began the week on the back foot, with a deep dive of USD/JPY and EUR/USD breaking above 1.20. However, the greenback made a comeback, partially thanks to a robust GDP read of 3%.

But following this recent NFP report the immediate reaction was a drop in the USD across the board.

NFP Background

We only had one early indicator, the ADP report, and it was certainly positive. The firm reported a ADP showed 237K, better than expected and accompanied with an upwards revision. The ISM PMIs are released only after the NFP, which is released early in the month.