Many forex traders are only concerned with the headline non-farm payrolls figures released out of the US which have painted a not-so-bright picture themselves. The US economy continues to shed full-time positions and replaces them with part-time jobs. While many are quick to point out the above 200,000 per month job growth average for 2014 when accounted for population growth the US economy should churn out almost twice as many jobs in a healthy economy.
Headline figures, the drop in the unemployment rate for the wrong reasons as well as the media have caused a rally in the US Dollar which may be short-lived as reality may be ignored by media reports and the general public, but it will catch up eventually. The US is not the only developed economy which struggles on the job front as New Zealand, Australia and Canada all reported labor market disappointments last week.
New Zealand reported no change in annualized second-quarter employment as compared to the first-quarter’s 3.7% increase. Economists expected employment to pick up by 4.0%, but data showed a 3.7% increase. Quarterly employment change missed estimates and rose only 0.4% while the labor force participation rate dropped to 68.9%. Average hourly earnings rose only 0.5% and missed estimates as well. The New Zealand Dollar weakened.
The Australian economy lost 300 jobs in July while June’s jobs gains were revised down to 14,900. Economists expected job growth of 13,200. The unemployment rate surged to 6.4% while the labor force participation rate rose to 64.8%. Unlike the US, Australia added 14,500 full-time positions and lost 14,800 part-time jobs. The Australian Dollar dropped, but has since stabilized.
Canada reported job gains of 200 which missed estimates for an increase of 24,000 jobs after June’s job losses of 9,400. The unemployment rate decreased to 7.0% while the labor force participation rate decreased to 65.9%. Canada lost 59,700 full-time positions in July and replaced them with 59,900 part-time jobs. The Canadian Dollar was pressured lower.