The U.S. jobs report showed nonfarm payrolls rose by 206,000 jobs, beating expectations and up from 190,000 previously estimated. However, the details of the report were less than impressive.
- The revision for the previous two months was -111K. This more than offsets the above-expected growth this month.
- The unemployment rate rose to 4.1%, the highest rate since November 2021.
- Average hourly earnings on an annual basis were 3.9%, the lowest in June 2021.
- Higher nonfarm payrolls helped boost government payrolls by 70,000, while the education and health sectors added 82,000 jobs. The two sectors accounted for 74% of the total increase for the month.
- Temporary benefits fell by -48K, indicating a slowing labor market.
- Professional and business services decreased by -17 thousand.
- Leisure and hospitality — a strong sector for job growth in the post-pandemic recovery and a bellwether for discretionary spending — rose by just 7,000 jobs.
Below is a summary of the job data:
The initial reaction in the forex market was for the dollar to rise, but those gains were quickly reversed as yields also turned negative.
The US dollar ended the day as the second weakest major currency after the Canadian dollar. The biggest declines were against the British pound (-0.45%), the Swiss franc (-0.49%) and the New Zealand dollar (-0.48%).
In the US debt market, yields moved lower with the shorter end moving more as traders increased expectations for interest rate cuts in September and through the end of the year.
When looking at the yield curve, the picture shows the following:
- 2-year yield 4.605%, -8.7bps
- 5-year yield 4.226%, -8.3 bps
- 10-year yield 4.278%, -6.9 bps
- 30-year bond yield 4.475%, -4.4bps
For the trading week, returns were also significantly lower with:
- 2-year yield falls -14.8bps
- The yield on the 5-year US Treasury note fell by 14.9 basis points.
- 10-year bond yield down 11.8 basis points
- The yield on the 30-year US Treasury note fell by about 8.0 basis points.
Lower yields also helped push stocks higher, completing a week that saw the Nasdaq close at record highs for every holiday-shortened day of the week.
- The Dow Industrial Average rose 0.17%.
- The S&P rose 0.55%.
- The Nasdaq rose 3.5%, its best week since April 22.
Despite the sharp rise in broader stock indices, Bitcoin has had a terrible week, dropping nearly $6,000 to -$56,718 currently.
Crude oil prices rose by $1.62 or 1.99% despite being down by $0.72 or -0.86% today.
