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Reuters
4 hours ago
- Business
- Reuters
Instant View: US job growth sharply slows in July, unemployment rate ticks higher
NEW YORK, July 31 (Reuters) - U.S. job growth slower much more than expected in July, and the data from the prior month was revised sharply lower, indicating the labor market could be showing signs of stalling. Nonfarm payrolls increased by 73,000 jobs in July, after rising by a downwardly revised 14,000 in June, the Labor Department data showed on Thursday. Economists polled by Reuters had forecast 110,000 jobs added last month. The unemployment rate rose to 4.2% in July from 4.1% in the previous month. STOCKS: S&P E-minis briefly pared declines and were last down 1.05% BONDS: Treasury yields dropped, with the yield on the benchmark U.S. 10-year note down 9.9 basis points at 4.261% and the two-year note yield down 18.2 basis points to 3.77% FOREX: The dollar weakened sharply, with the dollar index down 1.16% to 99.31 COMMENTS: HELEN GIVEN, DIRECTOR OF TRADING, MONEX USA, WASHINGTON: 'It's worse than anyone expected and the kicker is that downward revision for the prior month too…that figure going from 147,000 to just 14,000, it's frankly pretty shocking.' 'This is what Powell was emphasizing in his press conference on Wednesday. He did say on Wednesday that we were looking at holding rates steadier for longer, but that we were going to get two sets of employment data before the next Fed meeting. So as this first set has been so decidedly negative… the labor market is clearly, clearly cooling, that's going to raise the importance of that September figure as well.' 'I still don't think it's likely that the Fed will cut interest rates in September, I think they might keep holding off if we get an August jobs report that's not that bad. They might hold off further, but we'll definitely see a cut in October, and I would say definitely again in December as well. So, we're going to see likely 50 basis points of easing this year, which is a market change in overnight swaps from yesterday.' JEFF SCHULZE, HEAD OF ECONOMIC AND MARKET STRATEGY, CLEARBRIDGE INVESTMENTS, NEW YORK (emailed comment) "The July jobs report officially confirms that the labor market has kicked into a lower gear after today's headline miss coupled with negative revisions of -258k to the prior two months. Investors will need to recalibrate their views on what is the 'normal' pace of employment growth going forward given the headwinds of lower immigration, an aging demographic and the arrival of DOGE related layoffs. "This payroll report kicks the door wide open for a September rate cut. Although the effects of tariff pass-through still lie ahead, the Fed will not want to wait too long to begin its cutting cycle with the nonfarm payrolls flatlining at 35k on average over the past 3 months and the unemployment rate ticking higher. "While investors have been viewing the commencement of the Fed cutting cycle as a positive catalyst for risk assets, today's release is best characterized as 'bad news is bad news' in our view. With job creation at stall speed levels and the tariff headwind lying ahead, there's a strong possibility of a negative payroll print in the coming months which may conjure up fears of a recession. This print should pressure risk assets and cause safe haven buying in US treasuries.' JAMIE COX, MANAGING PARTNER, HARRIS FINANCIAL GROUP, RICHMOND, VA (emailed comment) "Powell is going to regret holding rates steady this week. September is a lock for a rate cut and it might even be a 50-basis point move to make up the lost time." ART HOGAN, CHIEF MARKET STRATEGIST, B. RILEY WEALTH, BOSTON (emailed comment) "Today's jobs report is unambiguously soft and a reflection of the trade and tariff impact on economic growth. Both the actual report and the big negative revisions are more evidence that the trade policy will slow growth. "What we know about our workforce population growth is that we need to create between 100 and 150 thousand jobs a month to keep the unemployment rate unchanged. That is down from a range of 150 to 200 thousand last year due to less immigration. The three-month average coming to today's report was 150 thousand. The new three-month average of job creation is now 80 thousand. Not great news." SEEMA SHAH, CHIEF GLOBAL STRATEGIST, PRINCIPAL ASSET MANAGEMENT, LONDON (emailed comment) "Not only was this a much weaker than forecast payrolls number, the monster downward revisions to the past two months inflicts a major blow to the picture of labor market robustness. What's more concerning is that with negative impact of tariffs only just starting to be felt, the coming months are likely to see even clearer evidence of a labor market slowdown. "Of course, with Powell emphasizing his focus on the unemployment rate which has only ticked up to 4.2%, perhaps it is too early to press the panic button. The shrinking of labor supply is somewhat offsetting the weakness in labor demand, keeping the labor market in an uneasy state of equilibrium. Even so, the sheer weakness of today's payrolls number means that Powell will have to take notice. The odds of a September cut just took a big leap higher." CHRIS ZACCARELLI, CHIEF INVESTMENT OFFICER, NORTHLIGHT ASSET MANAGEMENT, CHARLOTTE, NC (emailed comment): "Just two days after the conclusion of this month's Fed meeting, suddenly the dual mandate is back on the table. With this morning's payroll miss – and the downward revisions that came with it – the Fed will again need to balance a slowing job market with inflation which isn't slowing fast enough. "The knee jerk reaction from markets is for interest rates to drop and stock futures to give up ground. While normally it would make sense to focus more on the 3-month moving average and not the headline number, both are in play today because of the -258,000 revision to prior months' jobs numbers. "The stock market will probably move past this particular report and keep climbing this month, but today could be an ugly day in the market given the confluence of new tariff announcements and more evidence that the job market is slowing." BRIAN JACOBSEN, CHIEF ECONOMIST, ANNEX WEALTH MANAGEMENT, MENOMONEE FALLS, WISCONSIN: "If Powell knew then what he knows now, maybe even he would have dissented from the decision to continue the rate cut pause. There's no way to pretty-up this report. Previous months were revised significantly lower where the labor market has been on stall-speed. "History is repeating itself. Last year the Fed messed up by not cutting in July so they did a catch-up cut at their next meeting. They'll likely have to do the same thing this year."
CNA
25-07-2025
- Business
- CNA
Dollar falls against yen as markets weigh new trade deal, Japanese politics
LONDON/NEW YORK :The U.S. dollar strengthened against the Swiss franc and euro but weakened versus the yen on Wednesday as positive sentiment from a new U.S. trade deal was offset by political uncertainty surrounding Japanese Prime Minister Shigeru Ishiba's future. President Donald Trump announced a trade deal on Tuesday with Japan, which lowers tariffs on auto imports to 15 per cent in exchange for a $550 billion package of U.S.-bound investment and loans. It is the most significant of a clutch of agreements that Trump has bagged since unveiling sweeping global levies in April. The dollar gained against the Swiss franc, on track to snap three straight sessions of losses. It was last up 0.24 per cent to 0.79425. Wall Street's main indexes were all advancing while U.S. Treasury yields rose. The greenback weakened against the yen, hitting its lowest level since July 11 at 146.20 per dollar after reports that Ishiba intends to step down next month following a bruising upper house election defeat. Ishiba denied the reports that he had decided to resign, calling them "completely unfounded." The yen was last down 0.06 per cent at 146.565 yen. "The main thing driving USD/JPY has to do with political anxiety as it looks like the prime minister is feeling some pressure to consider resigning," Juan Perez, senior director of trading at Monex USA in Washington, told Reuters in a statement. "This deal helps automakers, for now, but leaves markets also wondering if at any point tariffs can be increased since they will not go away as tools for negotiating anything and everything. Japan, an advanced economy agreeing to new terms for trade does leave concern that successful tariff use will give incentive to keep using their threat." The European Union and the U.S. are heading towards a trade deal that would result in a broad tariff of 15 per cent on EU goods imported into the U.S., two diplomats told Reuters. The deal would mirror a similar agreement the U.S. struck with Japan. The euro pared earlier losses and was up 0.08 per cent against the dollar at $1.176250,. The U.S. dollar has been one of the biggest losers among major currencies since Trump announced sweeping tariffs on trading partners on April 2. The weakness continued as those duties were suspended to allow further negotiations, but has steadied this month. The August 1 deadline for tariff deals still looms for many countries and investors remain cautious on how it will play out. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, fell 0.14 per cent to 97.33, on track for four straight sessions of losses. "I think what the market is expecting is that there will be a blanket tariff of a certain amount: let's just say 10 per cent or so, and that has been set in place for quite a while. And I believe that it's discounted," said Jeff Young, head of investment strategy, at PGIM Quantitative Solutions in New Jersey. "The effect on the dollar is going to be ... folded into the overall macro picture. And I think it's going to be difficult to disentangle the exact impact of the tariff versus all the other things that are affecting the currency because I do think that a lot of that is pretty much already discounted." Sterling was up 0.26 per cent at $1.35690. The Aussie hit an eight-month high and was last up 0.4 per cent at U.S.$0.6584. Currency bid prices at 23 July 05:27 p.m. GMT Descript RIC Last U.S. Pct YTD High Low ion Close Chang Pct Bid Bid Previous e Session Dollar 97.272 97.462 -0.18 -10.34 97.612 97. index per cent per cent 272 Euro/Dol 1.1763 1.1755 0.06 per cent 13.61 per cent $1.176 $1. lar 5 171 1 Dollar/Y 146.48 146.645 -0.08 -6.88 per cent 147.21 146 en per cent 5 .15 Euro/Yen 172.36 172.33 0.02 per cent 5.6 per cent 172.74 171 .38 Dollar/S 0.7938 0.7924 0.22 per cent -12.5 per cent 0.7949 0.7 wiss 913 Sterling 1.3567 1.3534 0.26 per cent 8.49 per cent $1.357 $1. /Dollar 7 351 7 Dollar/C 1.3612 1.3605 0.07 per cent -5.32 per cent 1.3628 1.3 anadian 576 Aussie/D 0.6587 0.6556 0.48 per cent 6.45 per cent $0.660 $0. ollar 1 655 1 Euro/Swi 0.9338 0.931 0.3 per cent -0.62 per cent 0.9339 0.9 ss 294 Euro/Ste 0.8667 0.8683 -0.18 4.76 per cent 0.8687 0.8 rling per cent 648 NZ 0.6035 0.6003 0.52 per cent 7.84 per cent $0.604 0.5 Dollar/D 7 997 ollar Dollar/N 10.1092 10.067 0.42 per cent -11.06 10.127 10. orway per cent 053 5 Euro/Nor 11.8906 11.8338 0.48 per cent 1.03 per cent 11.897 11. way 803 Dollar/S 9.509 9.5065 0.03 per cent -13.69 9.5357 9.4 weden per cent 766 Euro/Swe 11.1863 11.1749 0.1 per cent -2.45 per cent 11.196 11. den 5 129
Reuters
23-07-2025
- Business
- Reuters
Dollar falls against yen as markets weigh new trade deal, Japanese politics
LONDON/NEW YORK, July 23 (Reuters) - The U.S. dollar strengthened against the Swiss franc and euro but weakened versus the yen on Wednesday as positive sentiment from a new U.S. trade deal was offset by political uncertainty surrounding Japanese Prime Minister Shigeru Ishiba's future. President Donald Trump announced a trade deal on Tuesday with Japan, which lowers tariffs on auto imports to 15% in exchange for a $550 billion package of U.S.-bound investment and loans. It is the most significant of a clutch of agreements that Trump has bagged since unveiling sweeping global levies in April. The dollar gained against the Swiss franc , on track to snap three straight sessions of losses. It was last up 0.24% to 0.79425. Wall Street's main indexes were all advancing while U.S. Treasury yields rose. The greenback weakened against the yen , hitting its lowest level since July 11 at 146.20 per dollar after reports that Ishiba intends to step down next month following a bruising upper house election defeat. Ishiba denied the reports that he had decided to resign, calling them "completely unfounded." The yen was last down 0.06% at 146.565 yen. "The main thing driving USD/JPY has to do with political anxiety as it looks like the prime minister is feeling some pressure to consider resigning," Juan Perez, senior director of trading at Monex USA in Washington, told Reuters in a statement. "This deal helps automakers, for now, but leaves markets also wondering if at any point tariffs can be increased since they will not go away as tools for negotiating anything and everything. Japan, an advanced economy agreeing to new terms for trade does leave concern that successful tariff use will give incentive to keep using their threat." The European Union and the U.S. are heading towards a trade deal that would result in a broad tariff of 15% on EU goods imported into the U.S., two diplomats told Reuters. The deal would mirror a similar agreement the U.S. struck with Japan. The euro pared earlier losses and was up 0.08% against the dollar at $1.176250, . The U.S. dollar has been one of the biggest losers among major currencies since Trump announced sweeping tariffs on trading partners on April 2. The weakness continued as those duties were suspended to allow further negotiations, but has steadied this month. The August 1 deadline for tariff deals still looms for many countries and investors remain cautious on how it will play out. The dollar index , which measures the greenback against a basket of currencies including the yen and the euro, fell 0.14% to 97.33, on track for four straight sessions of losses. "I think what the market is expecting is that there will be a blanket tariff of a certain amount: let's just say 10% or so, and that has been set in place for quite a while. And I believe that it's discounted," said Jeff Young, head of investment strategy, at PGIM Quantitative Solutions in New Jersey. "The effect on the dollar is going to be ... folded into the overall macro picture. And I think it's going to be difficult to disentangle the exact impact of the tariff versus all the other things that are affecting the currency because I do think that a lot of that is pretty much already discounted." Sterling was up 0.26% at $1.35690 . The Aussie hit an eight-month high and was last up 0.4% at U.S.$0.6584.
Business Recorder
16-07-2025
- Business
- Business Recorder
US dollar pares tumbles
NEW YORK: The US dollar tumbled on Wednesday on news reports that US President Donald Trump is planning to fire Federal Reserve Chair Jerome Powell, but pared the drop after Trump denied the plans. Trump said that he is not planning on doing anything, while also noting that he is unhappy that Powell is being too slow to cut interest rates. A source earlier told Reuters that Trump is open to the idea of firing Powell and polled some Republican lawmakers on firing Powell and received a positive response. Removing Powell before his term ends in May would be negative for the dollar as it would undermine credibility in the US financial system and the dollar as a safe-haven currency. 'What can kill the value of the US dollar, what can absolutely destroy faith in the US dollar, is attacking in any way, shape, or form the independence and authority of the Federal Reserve,' said Juan Perez, senior director of trading at Monex USA in Washington. Trump has railed against Powell for months for not easing rates and the Trump administration has also criticised cost overruns on a $2.5 billion renovation of the Fed's Washington headquarters. The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last down 0.27% on the day at 98.31, with the euro up 0.34% at $1.1639. Against the Japanese yen, the dollar weakened 0.52% to 148.1.
CNA
16-07-2025
- Business
- CNA
Dollar drops in choppy trading as Trump denies plans to fire Fed's Powell
NEW YORK :The U.S. dollar fell but rose off its lows on Wednesday after U.S. President Donald Trump denied news reports that he is planning to fire Federal Reserve Chair Jerome Powell. Bloomberg reported that the president is likely to fire Powell soon. A source also told Reuters that Trump is open to the idea of firing Powell and polled some Republican lawmakers on firing Powell and received a positive response. But Trump said that the reports are not true. "I don't rule out anything, but I think it's highly unlikely unless he has to leave for fraud," Trump said, a reference to recent White House and Republican lawmaker criticism of cost overruns in the $2.5 billion renovation of the Fed's historic headquarters in Washington. Removing Powell before his term ends in May would be negative for the dollar as it would undermine credibility in the U.S. financial system and the dollar as a safe-haven currency. "What can kill the value of the U.S. dollar, what can absolutely destroy faith in the U.S. dollar, is attacking in any way, shape, or form the independence and authority of the Federal Reserve," said Juan Perez, senior director of trading at Monex USA in Washington. Trump has railed against Powell for months for not easing rates, which he says should be at 1 per cent or lower. The dollar index, which measures the greenback against a basket of currencies, including the yen and the euro, was last down 0.25 per cent on the day at 98.34, with the euro up 0.3 per cent at $1.1633. Against the Japanese yen, the dollar weakened 0.7 per cent to 147.82. Sterling strengthened 0.24 per cent to $1.3411. If Trump were to fire Powell the markets would likely see a larger negative reaction in the dollar, said Francesco Pesole, FX strategist at ING in London. "Euro/dollar is at $1.17 and should be trading higher on this because the implications are massive. Markets are still not fully pricing this all in. You would expect that if Powell is removed today then the Fed cuts in September," he said. The single currency got as high as $1.1721 on Wednesday. Fed funds futures traders are now pricing in 47 basis points of cuts by year-end, up from 44 basis points before the news reports. The dollar gained earlier against the euro as traders bet that the U.S. central bank may be less likely to cut rates two times this year following an uptick in consumer prices in June, even though producer price inflation data on Wednesday was steady. U.S. producer prices were unexpectedly unchanged in June as an increase in the cost of goods because of tariffs on imports was offset by weakness in services. Tuesday's release showed U.S. consumer prices increased by the most in five months in June amid higher costs for some goods, suggesting that Trump's tariffs were starting to have an impact on inflation. "Yesterday's reaction to the inflation data was very positive for the U.S. dollar overall," said Eric Theoret, FX strategist at Scotiabank in Toronto. Investors continue to focus on tariffs ahead of an August 1 deadline when many trading partners face higher trade levies. Trump said on Wednesday the U.S. will probably "live by the letter" on tariffs with Japan and may have another trade deal coming up with India, following his announcement of an accord with Indonesia on Tuesday. In Japan, investors are focused on a potential power shift in upper house elections this weekend that could strain already frail finances, with long-dated yields soaring to all-time highs as the vote nears. In cryptocurrencies, bitcoin gained 2.82 per cent to $119,761 but held below a record high of $123,153 reached on Monday.
