Non Farm Payrolls Drop To 206,000, Exceeding Analyst Expectations

On July 5, 2024, U.S. released Non Farm Payrolls report for June. The report indicated that Non Farm Payrolls declined from 218,000 (revised from 272,000) to 206,000, compared to analyst consensus of 190,000.

Unemployment Rate increased from 4% in May to 4.1% in June, while analysts expected that it would remain unchanged at 4%.

Participation Rate increased from 62.5% to 62.6%. The report missed estimates as analysts expected that it would grow to 62.7%. Average Weekly Hours remained unchanged at 34.3, while Average Hourly Earnings grew by 0.3% on a month-over-month basis.

Treasury yields moved lower as bond traders reacted to the Non Farm Payrolls data. Currently, the yield of 2-year Treasuries is trying to settle below 4.63%, while the yield of 10-year Treasuries tests the 4.30% level. Traders focus on rising Unemployment Rate and bet on a less hawkish Fed.

U.S. Dollar Index pulled back below the 105.00 level after the release of the Non Farm Payrolls report. The revision of the previous report, which showed that U.S. economy created less jobs than previously expected, served as an additional negative catalyst for the American currency.

Gold made an attempt to settle above the $2375 level, supported by U.S. dollar’s pullback and falling Treasury yields. A move above $2375 will open the way to the test of the important resistance at $2390 – $2400.

SP500  tested new highs above the 5550 level. Fed policy outlook is among the key drivers for stocks, so falling Treasury yields provide additional support to SP500 and other major indices.

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