Unemployment Rate Rises, Highest In 26 Years
by Richard Lee
Unemployment continued to worsen in the month of June according to the latest US Non-Farm Payrolls report released in the New York morning. Although there are hints that recent slashing in jobs may have abated, figures continue to show a lack of support for recent optimism on a surge in economic recovery in the near term. According to the Labor Department report, non-farm payrolls declined by 467,000 in the month against expectations of an approximate 370,000 shortfall for June, now totaling a staggering 6.5 million jobs lost. Subsequently, the unemployment rate increased to 9.5 percent, slightly higher than the 9.4 percent printed in May and the highest in almost 26 years.
Notably, the report will likely lend to further US dollar strength on risk aversion sentiment as further indications surfaced of a lack of momentum in any near term recovery. Specifically, average hourly earnings remained unchanged for the month, with the duration of unemployment increasing for most in the labor market. Without employment improving, consumption is likely to remain muted doing more damage to a teetering world economy than helping it. Moreover, positive increases in employment were only seen in healthcare and education sectors, with declines in everything from construction to manufacturing. The sentiment was echoed in fixed income and FX markets with short term treasury yields ticking higher as traders are siding with the likelihood of “eternally” low interest rates.
Euro Test Support At 1.4000
Referring to a short term EURUSD chart, the morning’s release is set to place the 1.4000 support in play, with a break lower targeting the 1.3880 (June 25th low) support level.
Headlines
Tags: Euro Currency, Initial Jobless Claims, Non-Farm Payrolls, Unemployment Rate, US Dollar
About the Author - Richard Lee
Richard C. Lee is the Chief Currency Strategist for OnlineForexTrading.com. Employing both fundamental and technical models, Richard has previously been featured on DailyFX.com, Bloomberg, FX Street.com, Yahoo Finance and Trading Markets.com. In analyzing the markets, he draws from an extensive experience trading fixed income and spot currency markets in addition to previous bouts in options, futures and equities.
