US Employment data causes volatility

Source: Dukascopy Bank SA


On Friday, at 13:30 GMT, the US Bureau of Labour Statistics published the monthly US employment data sets. Namely, the US Average Hourly Earnings, Non-Farm Employment Change and the Unemployment Rate.

The data was mixed. The Unemployment Rate hit the market forecast of 6.0%. The Non-Farm Employment Change was at 916,000 new jobs instead of the expected 652,000. This caused an initial bounce up. However, the Average Hourly Earnings data was a negative 0.1% instead of the expected growth of 0.1%. Due to the negative earnings the USD value declined.

One can use the data to calculate changes in the local demand for the USD by the paying out of wages.

Namely, there were unexpected 264,000 new jobs created. Multiply that with the US median wage of the last quarter of 2020 of 3,936.00 USD per month. The result is 1,039,104,000.00 USD.

Meanwhile, there are 150,570,000 employed in the US in accordance with the 2021 estimate. If we apply the monthly average salary to the number, we get total income from wages at 592,643,520,000.00 USD. A difference of 0.2% in the actual data from the forecast is 1,185,287,040.00 USD.

In general, we have an increase of USD demand by new jobs at 1,039,104,000.00 USD versus the loss of demand in average wages at 1,185,287,040.00 USD. That is why there was an initial move down and an immediate move up on the EUR/USD chart.

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