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US Nonfarm Payrolls Sky-Rocket in July, Unemployment Stays Flat

US Job Creation Surpasses Expectations for Second Straight Month

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For the second consecutive month, job figures surpassed expectations by a large margin with 217,000 jobs added during the month of July. This is exceedingly good news for the Federal Reserve which suffered a major embarrassment two months ago when job creation fell to 11,000 for the weakest print in years. After May’s poor jobs data, all shreds of hope for an interest rate hike went ‘out the door’ in 2016. With job creation exceeding the Feds target, the FOMC might be able to continue the gradual pace of rate hikes as was expected back at the beginning of the year.

Payrolls Rose by 217,000, Average Hourly Earning Also Up


Job figures for July exceeded all expectations after the US Bureau of Labor Statistics released its jobs data on Friday. Payrolls rose by 255,000, surpassing expectations of 180,000 but falling short of June’s job growth of 292,000. More positive indications arrived on Friday with increasing average hourly earnings also reported. Average hourly earnings measures the change in the price businesses pay for labor that does not include the agricultural sector. The earnings index rose 0.30% during the month, beating forecasts of a 0.20% increase.

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Unemployed Stays at 4.90%, Short of Expectations


While the nonfarm payroll data was positive for July, unemployment rates remained slightly elevated above levels forecasted. The unemployment rate stayed flat at 4.90%, matching the prior figure but failing to meet expectations of 4.80%. The unemployment rate is still below the critical 5.00% level and the bullish payroll data for two consecutive periods will outshine the unemployment rate at the next FOMC meeting.

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Strong Canadian PMI Boosts Loonie

 

 

The pace of purchasing activity in Canada continued its growth during July as measures of employment and inventories boomed, according to Ivey Purchasing Index data released on Friday. The seasonally adjusted index soared to 57.00 from 51.70 in June, shattering experts’ expectations for a reading of 50.90. As a reading above 50.00 indicates expansion, the Canadian dollar fared well against the greenback following the announcement. The USDCAD pair finished the day at 1.3162, a -0.06% change in favor of the Loonie. The Canadian dollar has had a rocky 2016 after immense losses in oil weighed heavily on the currency before it was able to rebound. A string of bullish data coming from Canada is a positive step for normalization of the economy and greater strength in the currency.

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