After a positive headline result, a little digging into the latest US unemployment data showed some surprising indications about the pace of economic activity, especially that underemployment and slow wage growth are prevailing. As a result, the expectations of a forthcoming rate hike from the Federal Reserve over the coming months has been pushed back further into the year, with futures only pricing in the likelihood of two hikes throughout the calendar year.
Although the figure marked the strongest job growth in four months, the prior two months’ figures were revised in another setback for employment measures, with November and December job growth reduced by 39,000 jobs. Further, the labor force participation rate on hold failed to acknowledge that a record number of Americans eligible to work are currently outside the labor force. The dollar extended its slide after the announcement, pushing gold prices to the highest close since November.
US Unemployment Ticks Higher
Daily Analysis - 06/02/2017