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What Was Behind Friday's "Literally Shocking" Payrolls Miss


by Tyler Durden
By Steve Englander, head global G10 FX research at Standard Chartered bank
Summary:
We see sampling issues and child-care concerns as the most likely drivers of the NFP weakness
We are skeptical of the work disincentives explanation as the number of UI benefit recipients and of long-term unemployed dropped sharply
Seasonality was normal, so this does not seem to have been a major issue
We doubt the Fed will change its stance, even if an abnormal May bounce offsets the April shortfall
Work disincentives likely a future issue, but not in April
There is a lot of discussion on the big forecast miss of April non-farm payrolls (NFP). The consensus was for around 1mn jobs, our forecast was 1.5mn and the outcome was 266,000 (Bloomberg even called it literally shocking data ). Against much commentary in recent days, we doubt that the generosity of unemployment insurance (UI) benefits played an important role in April, but we do not underesti ....

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Hunt for yield to keep dollar weak for at least three months


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BENGALURU (Reuters) - The dollar s weakness will continue for at least another three months, according to a Reuters poll of foreign exchange strategists, a majority of whom said a hunt for yield would dictate moves in currency markets in the near term.
After gaining nearly 4% in the first quarter, marking its best start in years, the dollar index - measured against a basket of six major currencies - fell more than 2% in April, its weakest performance in four months.
Despite the greenback s rebound in recent trading sessions, partly sparked by comments from U.S. Treasury Secretary Janet Yellen that interest rate hikes may be needed to stop the economy from overheating, the currency was not expected to make a sustained recovery. ....

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