NFP Cements Rate Hike With 235k, Wages Up 2.8% M/m – USD Sells The Fact

NFP beats expectations with 235K and January revised higher to 238K. The unemployment rate drops to 4.7%. Wages are up 0.2% m/m, slightly below predictions but the previous month was revised up. The “real unemployment rate” falls to 9.2%. All in all, a solid report.

The dollar is sliding across the board. It seems like a “sell the fact” phenomenon.

The US Non-Farm Payrolls report was expected to show a gain of around 185K (or 220K after the strong ADP). More importantly, wages carried expectations for a rise of 0.3% m/m and around 2.8% y/y.

The bar was very low for a rate hike in five days time. Fed Chair Janet Yellen basically told us that a hike is coming barring any disaster. Given the late publication, on the tenth, the Fed may have already had the data.

February 2017 NFP Data (updated)

Non-Farm Payrolls: 235K (exp. +185K, whisper 220K, last 227K before revisions)

Average Hourly Earnings 0.2% m/m with an upgrade to January: 0.2% against 0.1%, 2.8% y/y(exp. +0.3% m/m, last month 0.1% m/m, 2.5% y/y)

Revisions: +9K (-39KK last time).

Participation Rate: 63% (62.9% last month )

Unemployment Rate: 4.7% (exp.4.8%, last month 4.8%)

Private Sector: 227K (ADP showed 298K).

Real Unemployment Rate (U-6): 9.2% (previous: 9.4%).

Employment to population ratio: 60% (previous: 59.9%)

Average workweek: 34.4K (last month: 34.4).

NFP Currency Reaction

EUR/USD was around 1.06 enjoying the Draghi boost. The pair advances and challenges resistance at 1.0630.