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U.S. Nonfarm Payrolls Rise 75,000, Wage Inflation Falls to 3.1%

Economic IndicatorsJun 07, 2019 08:46AM ET
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Investing.com - The U.S. economy created fewer jobs than expected in May and wage inflation unexpectedly eased, adding to speculation that the Federal Reserve will cut official interest rates for the first time in a decade.

Nonfarm payrolls (NFP) rose by 75,000 in May, below consensus expectations for 185,000, according to official government data released on Friday. That was down from an average of over 200,000 in March and April.

The jobless rate held steady as expected at 3.6%, the lowest level since December 1969 when it was 3.5%.

Wage inflation grew just 3.1% on an annualized basis, dropping from the prior month’s reading of 3.2. Consensus had expected no change.

Although U.S. futures pared gains immediately following the release the U.S. dollar index, which measures the greenback against a basket of major currencies, extended losses and was down 0.4% at 96.60 at 8:45 AM ET (12:45 GMT), compared to 96.98 ahead of the release.

The data "can only fuel rate cut speculation and more technical evidence of $USD top," said Marc Chandler, chief market strategist at Bannockburn Global Forex via Twitter. He pointed to the fact that not only job creation, but earnings and hours worked were "disappointing".

After an initially modest response, the benchmark 10-year Treasury yield fell some four basis points to 2.06%, its lowest since September 2017.

Markets have steadily hiked bets that the Fed will cut rates this year, as trade tensions escalate between the U.S. and China, while President Donald Trump threatens Mexico with increasing tariffs in a separate dispute over illegal immigration.

Fed Chair Jerome Powell this week indicated a willingness to “act as appropriate to sustain the economic expansion."

The worse-than-expected job creation, coupled with easing wage inflation adds to conviction that the U.S. central bank could ease policy.

While markets expect rates to hold steady at the June 18-19 policy meeting, Fed fund futures are pricing the first rate cut to arrive in July with another following in September. The probability of a third cut in December is holding near the 50% mark.

U.S. Nonfarm Payrolls Rise 75,000, Wage Inflation Falls to 3.1%
 

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Comments (15)
Iyarin Boonnum
Iyarin Boonnum Jun 07, 2019 11:33AM ET
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Non Farm Payroll will rose to 200K and more 555 Thanks to Trump!!! Hurray !!!
Zaca BV
Zaca BV Jun 07, 2019 10:54AM ET
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Do you expect job creation to keep rising until unemployment reaches 0%, even at the best levels in 50 years? It is natural that the economy at some point shows caution, and there the government plays its part.
Iron Mike
OMGItsIronMike Jun 07, 2019 9:17AM ET
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Trump tariffs will benefit USA for years to come, suffer now a bit so we can prosper for many many years, this is the bigger picture unless you would like to be call Estados Unidos of Mexico or United States of China
Taylor Jason
Taylor Jason Jun 07, 2019 9:17AM ET
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tariffs benefit no one why do u think the us is subsidizing all the farmers right now?. it is well documented by many economists over numerous studies that tariffs lead to a deadweight loss
short gold
short gold Jun 07, 2019 9:14AM ET
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250000 where hired. but they dont start until next month when they graduate
Peter Halim
Peter Halim Jun 07, 2019 9:00AM ET
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amazing DJ... rational or irrational?
Dawn Aguilar
Dawn Aguilar Jun 07, 2019 8:52AM ET
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We still have so many jobs and were doing great, but these tariffs and bullying other countries (oh, I don't know, our top 3 trading partners ... China, Europe and Mexico), are going to cause our demise.  Stocks are rallying in hopes of the fed to save us from political nonsense.  Going to all time high again (for what?????)  Market wants to go up and will continue to until the floor drops.  When, who knows.  We'll all get burned.  Hold some cash in the meantime and follow.
Taylor Jason
Taylor Jason Jun 07, 2019 8:52AM ET
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the market thinks rate cuts will be the end all be all cure, however I tend to disagree because rate cuts aren't going to solve the structural problem of losing one of its biggest trading partners. I personally cashed out at around 2900 and equitized my port with bond futures. If warren Buffett can sit on a $100 billion for years while waiting for an attractive opportunity then I think I could do the same with my measly brokerage account.
chris kassouf
chris kassouf Jun 07, 2019 8:50AM ET
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becareful chasing anything here..most moves have been made..
Dawn Aguilar
Dawn Aguilar Jun 07, 2019 8:49AM ET
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When the recession hits, the fed will be out of bullets trying to save us now.  Employment is still very high and the more anxiety in the markets, the more business will screech to a halt.  Aggravating dealing with a president who doesn't know anything about economics or business/consumer sentiment and continues to blame everybody else for his own actions.
Will Contarino
Will Contarino Jun 07, 2019 8:49AM ET
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Trump is waiting to stage “The Deal” with China before next year’s election. That way a huge relief rally will take place going into election year
Dawn Aguilar
Dawn Aguilar Jun 07, 2019 8:49AM ET
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Will Contarino  - agree.  I think he's going to mess it up now, but fix it before elections maybe.  Sad that we are all held hostage until then.  He'll think he's a hero when he makes the deal with China before elections.   So hard to trade this market .. fundamentals, intellect just seem out the window here as well as economics.
Dawn Aguilar
Dawn Aguilar Jun 07, 2019 8:49AM ET
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I agree.  I think he's going to mess it up now, but fix it before elections maybe.  Sad that we are all held hostage until then.  He'll think he's a hero when he makes the deal with China before elections.   So hard to trade this market .. fundamentals, intellect just seem out the window here as well as economics.
Tom OKray
Tom OKray Jun 07, 2019 8:49AM ET
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The Trump effect is here falling new jobs, falling wages and falling GDP. Time for his removal by any means necessary impeachment or landslide loss in 2020. prefer the landslide loss as it would really hurt the narcissists ego.
Taylor Jason
Taylor Jason Jun 07, 2019 8:49AM ET
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market rallied for the past 2 years due his tax cuts which have all but evaporated. lower GDP incoming. my guess the lower numbers will begin to come in sometime around august
Taylor Jason
Taylor Jason Jun 07, 2019 8:49AM ET
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market rallied for the past 2 years due his tax cuts which have all but evaporated. lower GDP incoming. my guess the lower numbers will begin to come in sometime around august
Michael Angelo
Michael Angelo Jun 07, 2019 8:48AM ET
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Ok news are bad and amateurs think this is good for the market because the interest will be adjusted "accordingly". BUT why don't start thinking that Corp earnings also will adjust "accordingly"... and we have a megabubble... and USA becomes Japan. (of course with T rump and all the medi a sho w). Good luck.
Kyriakos Kakofegitis
Kyriakos Kakofegitis Jun 07, 2019 8:48AM ET
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history repeats it self! maybe we dont have megabubble but we will have mega troubels on markets
Kyriakos Kakofegitis
Kyriakos Kakofegitis Jun 07, 2019 8:48AM ET
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look at also xauusd the weekly patern.. looks like a bull
Alec Santana
Alec Santana Jun 07, 2019 8:46AM ET
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Need the rate cut
toto caca
toto caca Jun 07, 2019 8:43AM ET
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no rally will continue because Trump and fed support this rally
Yasir Azim
Yasir Azim Jun 07, 2019 8:39AM ET
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End of bull rally?
Kira Nelson
Kira Nelson Jun 07, 2019 8:39AM ET
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Eh. Who knows any more. Data has been bad for a while, but the stock market seems to contradict them. Have to wait for Trump to tweet something to confirm direction.
Yasir Azim
Yasir Azim Jun 07, 2019 8:39AM ET
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After the news markets went down on futures now jump back up like crazy
Rami Daoudi
Rami Daoudi Jun 07, 2019 8:38AM ET
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I expect NSDQ to reach a new ATH by next week.
Will Contarino
Will Contarino Jun 07, 2019 8:37AM ET
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We got bad news. You know what that means. Stock rally
Vorname Nachname
Vorname Nachname Jun 07, 2019 8:37AM ET
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But when Mr. Trump tweets something about China, stocks fall through the bottom...
Will Contarino
Will Contarino Jun 07, 2019 8:37AM ET
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The “trade war” is really a guise that keeps dragging on in order to slow the economy down through fear of unknown. By slowing the economy down we can get the Fed to begin easy money again. Trump is staging the trade deal breakthrough to occur going into his final year before election. The relief rally after the trade deal will be enormous and Trump will get reelected. After he gets reelected the market will crash, he’ll be the scapegoat, and a socialist will step in in 2024. Just a theory.
 
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