Nonfarm payrolls up less than expected; unemployment rate rises
By Polya Lesova and Myra P. Saefong, MarketWatch
LONDON (MarketWatch) — The dollar fell sharply against major rivals on Friday after data showed an increase in the U.S. unemployment rate and a smaller-than-expected rise in nonfarm payrolls in November, fueling concerns about the health of the economic recovery.
The greenback was already trading lower before the report, but its losses were extended after the Labor Department said that nonfarm payrolls rose by 39,000 in November. The number was much lower than the 155,000 increase expected by economists polled by MarketWatch. Read more about the jobs report.
In addition, the unemployment rate spiked to 9.8% in November from 9.6% in October, defying expectations for an unchanged reading.
The dollar index (DXY 79.53, -0.78, -0.97%) , which measures the performance of the greenback against a basket of other major currencies, slumped to 79.585 in recent trading, down from 80.059 before the data and 80.210 on Thursday.
The employment data were “wholly disappointing,” said strategists at Brown Brothers Harriman & Co. in a note to clients.
“In terms of dollar implications, it is negative and it, coupled with the [European Central Bank’s] efforts to stabilize the sovereign bond market in Europe (the so-called transmission mechanism), the euro is likely to continue to recover from the monthlong slide in November,” they said. “The decline in U.S. rates will also weigh on the greenback, not just against the euro but against the yen as well.”
The dollar fell particularly sharply against the Japanese yen. The greenback (USDYEN 82.7100, -1.1500, -1.3715%) was buying ¥82.64, down from ¥83.87 Thursday. See real-time currency quotes and tools.
The euro (EURUSD 1.3340, +0.0124, +0.9379%) rose to $1.3335, up slightly from $1.3222 in North American trade late Thursday.
The British pound gained 0.6% to $1.5685.
The greenback had weakened Thursday against the euro after news that the ECB was buying up euro-zone debt. See Thursday’s currencies story.
