Non-Farm Payrolls Beat With 227k But Wages Miss With 2.5% Y/Y

The beat on the headline was not a huge surprise after the ADP number. 227K is the figure. However, the wages are a negative surprise. Year over year, wages are also disappointing, also due to downwards revisions. The number is only 2.5%, a big downfall. The unemployment rate is 4.8% but at least the participation rate is up to 62.9%, so this is not too bad. Revisions are to the downside.

The US dollar falls on the release but doesn’t go too far.

The other figures (detailed below) are also somewhat confusing, but when the dust settles, the miss on wages could be the dominant theme.

The US was expected to report a gain of 175K jobs in January 2017 with an unemployment rate of 4.7%. More importantly, wages were predicted to advance by 0.3% m/m and 2.8% y/y.

The US dollar was rebounding ahead of the publication, but we saw three reasons to sell the greenback.

January 2017 NFP Data (updated)

Non-Farm Payrolls: 227K (exp. +170K, last 156K before revisions)

Average Hourly Earnings 0.1% m/m, 2.5% y/y (exp. +0.3% m/m, last month 0.4% m/m, 2.9% y/y)

Revisions: -39/k – 156K in December and 164K for November(+19K last time).

Participation Rate: 62.9% (62.7% last month )

Unemployment Rate: 4.8% (exp.4.7%, last month 4.6%)

Private Sector: 237K (ADP showed 146K).

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

Employment to population ratio: 59.9% (previous: 59.7%)

Average workweek: 34.4(last month: 34.4).

NFP Currency Reaction