The U.S. economy added 49,000 new full-time jobs in January 2021, close to the market consensus for a gain of 50,000, the U.S. Labor Department reported. Restrictions imposed on businesses due to the COVID-19 outbreak began to ease last month due to lower new infections and hospitalizations and an acceleration in vaccinations.
In January, significant job gains in professional and business services and both public and private education were offset by losses in leisure and hospitality, retail trade, health care, and transportation. However, this is a modest increase that leaves the economy about 10 million jobs short of its February 2020 employment peak. In contrast, the U.S. unemployment rate fell to 6.3 percent in January 2021, down 0.4 percentage points from the previous month and well below market expectations of 6.7 percent.
The change in total nonfarm payroll employment for November was revised down by 72,000 to 264,000 and the change for December was revised down by 87,000 to -227,000. After these revisions, November and December employment combined were 159,000 lower than previously reported. This is a very big negative surprise.
In reaction to the macroeconomic data from the US labor market, the dollar seems to have weakened. The EUR/USD exchange rate rose from around 1.1950 to the level of 1.2025. All this is happening together with the increase in prices on the US debt, which seems to contribute to the decline in yields of US bonds and thus the attractiveness of the dollar.
On Friday, US stock market futures rose, with the S&P500 and Nasdaq improving their records from the previous session. In addition to macroeconomic data, an important development may be that the Senate passed a budget plan that will allow President Joe Biden's $1.9 trillion stimulus project to proceed without Republican support. The US president's official speech on the aid program will begin at 5:45 pm.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
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