The results of the US employment report for March:
- Prior reading 236K (revised higher to 268K)
- Unemployment rate falls to 7.6% vs 7.7% exp
- Prior unemployment rate 7.7%
- Private payrolls +95K vs +209K exp
- Manufacturing payrolls -3K vs +10K exp
- Avg workweek 34.6hrs vs 34.5hrs exp
Some silver linings with the unemployment rate and average workweek but it’s a weak report, no doubt. The US dollar is slumping hard.
It’s 1K higher than the June 2012 number but for all intents and purposes it matches the lowest number since July 2011.
The market reactions are bigger than I would have expected, even for such a poor number. There are four potential caveats:
- Cool weather
- Seasonal adjustments because of an early Easter
- Late payouts for tax returns because of tax changes
- The sequester
I think the sequester will get attention but the other three factors are the bigger drivers, in my opinion. The market is jittery after yesterday’s mayhem but the numbers this week all pointed in the same direction so it’s not just one data point. The results mean Fed officials will ramp down talk about tapering asset purchases by year-end.
That’s bullish for gold and negative for the US dollar.
