US nonfarm payrolls show just 38k jobs in May

The latest US nonfarm payrolls report greatly disappointed the markets on Friday and pressured the dollar. According to data released by the Labor Department, US employers created a mere 38,000 jobs to the economy in May. This missed forecasts of more than 160,000. Meanwhile April’s figure was revised lower to 123,000 from 160,000.

The dismal jobs report may put on hold the Federal Reserve’s plans for raising short-term interest rates. The Fed’s policymakers may now prefer to wait for more data to see whether the US economy remains on a recovery route before they make a move.

A rate increase at next week’s FOMC meeting is almost surely off the table. A move at their July meeting six weeks later is still possible though less likely, because Fed officials won’t have that much more economic data to reassure themselves about the course of the economy’s expansion, according to their remarks.

Some officials could prefer to wait until their September meeting to consider lifting rates, provided the economy picks up during the summer.

The Fed’s next signal comes later on Monday from Fed Chair Janet Yellen who is scheduled to appear in Philadelphia on the economic outlook and monetary policy. Markets will closely listen for any clues on rate hikes. A dovish tone fro Yellen would be negative for the dollar.

The post US nonfarm payrolls show just 38k jobs in May appeared first on FXTM Blog.

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