A Respectable U.S. Jobs Report Elevates Dollar Somewhat Further

April 2, 2010

Non-farm payroll jobs advanced 162K last month.  That was not far from post-ADP expectations in the market.  It was also the largest monthly advance since March 2007 and the third best gain since May 2006.  With combined upward revisions of 62K in January-February, jobs increased by 54K per month on average last quarter compared to quarterly average drops of 90K per month in 4Q09, 261K IN 3Q09, 477K in 2Q, 753K in 1Q, 652K in 4Q08, 339K in 3Q08, 191K in 2Q08, and 33K in 1Q08.  Job had risen by 70K per month in 4Q07 just before the recession began.  Not including temporary census workers, employment increased 114K.  Factory jobs increased 17K last month and by 45K in the first quarter.

Not all aspects of the report were favorable.  The jobless rate of 9.749% just missed being ticked higher after printing at 9.7% in January and February, and such is only four-tenths off the cyclical peak of 10.1% last October.  It will take real GDP growth of about 3% or better annualized to prevent unemployment from creeping higher.  The broadest jobless measure, including discouraged workers and those settling for part-time positions was 16.9% in March, up from 16.8% in February and 16.5% in January and not far from its recent high of 17.3% in December 2009.  A second disappointment was the 0.1% dip in average hourly wages, the first monthly drop since at least 2006.  Wages were only 1.8% higher than in March 2009.

Compared to quotes at 10:45 GMT, that is 105 minutes prior to the labor market announcement, the dollar is now up roughly a half percent against the yen, euro, sterling and Swiss franc.  Commodity-sensitive currencies, which stand to benefit from a global economic recovery, have been comparatively resilient.  The loonie is 0.3% higher against the greenback, and the kiwi and Aussie dollar are down no more than 0.2%.

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.



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