US Dollar Stalls on Disappointing December Jobs Report

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The US dollar is struggling to close out the first trading week of 2021 as the December jobs report fell short of market estimates. But the greenback appears to be joining the slump in the broader financial markets as the leading indexes tumbled.

According to the Bureau of Labor Statistics (BLS), the US economy added 199,000 jobs in December, below the median forecast of 400,000. This is also down from the 249,000 jobs created in November.

The unemployment rate dipped to 3.9%, lower than economists’ expectations of 4.1%.

Moreover, the labor force participation rate was unchanged at 61.9%, average hourly earnings rose 0.6% to $31.31, and average weekly hours slid to 34.7.

Here is a look at the employment trends of last month:

  • Leisure and hospitality: +53,000
  • Professional and business services: +43,000
  • Manufacturing: +26,000
  • Construction: +22,000
  • Transportation and warehousing +19,000

The government and the retail sector shed 12,000 and 2,100 jobs, respectively.

The BLS data contracted the ADP report from earlier this week, which showed private payrolls soared 807,000.

Overall, the US economy added more than 6.4 million jobs in 2021, but the country is still short between three and five million jobs from before the coronavirus pandemic. Plus, market analysts are still waiting to see any potential impact from the spread of the Omicron variant. Most of the spikes that have occurred came right before Christmas.

The US dollar has failed to rise on the news, despite typically serving as a safe-haven asset.

The US Dollar Index (DXY), which gauges the greenback against a basket of currencies, fell 0.15% to 96.18, from an opening of 96.26. The index will record a weekly gain of 0.25%.

The Treasury market was mostly in the green, with the benchmark 10-year yield up 0.017% to 1.75%. The one-year bill edged up 0.008% to 0.44%, while the 30-year bond was unchanged at 2.093%.

The USD/CAD currency pair tumbled 0.17% to 1.2707, from an opening of 1.2728, at 13:16 GMT on Friday. The EUR/USD rose 0.14% to 1.1316, from an opening of 1.1297.

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