The employment situation in the United States is front-page news today. The Non-farm payrolls were released today at 12:30 GMT.
Let’s see what hints we had during the month of September ahead of this release.
On September 6th we had August Non-Farm Payrolls released at worse than expected 130K below the forecast of 160K and revised down the previous amount to 159K from 164.
On September 10th the US JOLTs Job Openings report came in below expectations at 7.217M labor vacancies.
September 24th showed us that the Conference Board Consumer Confidence soured to 125.1 against the previously lowered number of 134.2.
The beginning of October is what really surprised the market. First with the ISM Manufacturing Employment falling to 46.3 from 47.4 in August, followed by depressing ADP Nonfarm Employment Change, which is a good way to forecast the non-farm payrolls that follow in its steps. The ADP report came in at a troubling 135K, below the adjusted forecast of 157K, adjusted down from a hefty 195K.
The Challenger Job Cuts report was a bit refreshing, with fewer job cuts reported in September at 41.557K versus 53.480K in August.
Initial Jobless Claims and Continuing Jobless Claims, technically, remain in range with a bearish tint. Reported at 219K and 1,651K respectively.
This brings us to today and the release of a few important indicators that have sent mixed signals to the market.
Average Hourly Earnings remained unchanged at 0% MoM, while YoY took a dip to 2.9% below the previous findings and forecast of 3.2%.
Nonfarm Payrolls in September were reported at 136K, below the forecast 140K and the updated previous findings of 168K. Revised up from 130K. Private NFP also came in lower than expected at 114K.
The interesting thing is that the Unemployment Rate came in at a baffling decrease to 3.5%. This is the lowest level in 50 years, last recorded in December 1969.
The negative aspect of new job creation, manufacturing and non-manufacturing PMI, and consumer confidence are all warning signs that the record long expansion is abating. While the unemployment change is acting like a cushion which helps the financial markets curb the risk of recession, for now.
On a 4HTF for EURUSD, the global trend remains bearish, and the price has reached a strong level of resistance which is near the global trend line down. The local trend line up will help us get a signal when the price starts moving down again.
Once the price breaks the local trend line down, our targets will become support at 1.09466, then 1.09263, followed by 1.09046 and finally the lowest low since 2017 at 1.08791.