The US economy lost 23,000 jobs in July, a sharp miss against forecasts, and revisions erased 103,000 jobs from the prior two months. Treasury yields and the dollar fell as traders scaled back bets on a Federal Reserve rate rise next month, while gold jumped to a seven-week high.
US employers cut 23,000 jobs in July, a miss against the 80,000 gain economists polled by Bloomberg had forecast. Government revisions also erased a combined 103,000 jobs from May and June. The report sent traders unwinding bets on higher US interest rates, weakening the dollar and dragging down Treasury yields.
Where the losses hit
Local government education lost 50,000 positions. Retail trade shed 19,000 jobs. Financial activities cut 14,000 roles. Health care kept hiring, adding 22,000 jobs. Even so, the unemployment rate fell to 4.1%, the lowest level since June last year, as a result of people leaving the workforce.
JPMorgan's chief economist Bruce Kasman said the report's weakness "is something that is genuine."
Dollar slides as rate bets unwind
The two-year Treasury yield, which moves with interest rate expectations, fell 0.09 percentage points to 4.16%, its lowest level since mid-July. Markets now price roughly a 40% chance of a quarter-point rate rise next month, down from nearly 60% before the jobs data. The dollar index, which tracks the currency against a basket of peers, fell 0.4% on the day. The pound, meanwhile, rose half a cent to $1.35.
Gold jumps to a seven-week high
Gold hit a seven-week high after the weak payrolls data. Spot prices jumped 3% to around $4,345 an ounce. But analysts said next week's inflation data would weigh more heavily on the Fed's next move than Friday's jobs numbers.
Sources: Financial Times, The Guardian
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