subject: U.S. Nonfarm Payrolls Rises 39K in November Amid Expectations of 150K [print this page] U.S. Nonfarm Payrolls Rises 39K in November Amid Expectations of 150K
Nonfarm payrolls in the world's largest economy advanced 39K in November after climbing a revised 172K the month prior amid economists' forecasts of 150K. At the same time, the unemployment rate rose to 9.8 percent to mark the highest level since April of this year. Taking a look at the breakdown of the report, private payrolls rose 50K, marking the lowest reading since January. The diffusion index for the private sector payrolls plunged from 58 to 52, a signal that the span of job creation scaled back but more industries added onto payrolls than not. Meanwhile, manufacturing came in at -13 from -11 in October as manufactures slashed jobs for the fourth consecutive month, while temporary help inched 5 points higher. Today's report surprised the currency markets as the slew of positive news prior to the labor force release pointed to a better than expected NFP report.
As a result, the dollar continued its southern journey against its major counterparts for the third straight day as risk appetite looks to have regained its footing, while stocks plunged and treasuries jumped. Indeed, today's report provides reasoning for the Fed's recent decision to increase asset purchases, but the recent decline in the greenback may be a mere correction following the sharp rally in the currency.
USDJPY Daily Chart
Source: FXCM's Strategy Trader - Prepared by Michael Wright
Taking a look at price action, the USDJPY took a free fall from the 83.80 level and now looks poised to continue its southern journey on the back of U.S. dollar weakness. Indeed, I have been very cautious about entering into a USDJPY long position due to the fact that the greenback was rallying on the back of debt concerns in the Euro-Zone rather than strong fundamentals in the world's largest economy itself. Today's immediate free fall coincides with a break below the rising trend line on the hourly chart. If price action can maintain its current levels, further losses may be in the horizon. It is also worth noting that the parabolic SAR has flipped to the downside, while our speculative sentiment index rose to 4.432, both signaling for additional losses.
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