A weak number from the US gives nonfarm payrolls at 169,000 in August, from 104,000 seasonally adjusted jobs added in the previous month.
That 104,000 is revised way down from 162,000 last month, and June's number see revisions from 188,000 to 174,000. So that's three weak numbers in a row.
Markets were looking for a number around 180,000, with analyst guesses ranging from 79,000 to 220,000.
The unemployment number drops to 7.3, despite expectations that it would stay flat at 7.4. Regardless, 7.3 is the lowest number we've seen since December 2008.
It slipped on the lower participation rate, which fell to 63.2 per cent, an August 1978 low, and a lower employment rate.
That could imply that Federal Reserve tapering is unlikely - as unemployment fell because of lower participation, not higher job creation.
Vaughan Atton, corporate FX dealer at UKForex:
Markets were on tenterhooks ahead of what ended up a disappointing non-farms release. Price reacted accordingly with the Dollar losing ground, though selling was limited by a decline in the US unemployment rate to 7.3%.
We feel this almost offsets the weaker non-farms number as the FED’s target has moved one step closer to its 7% target. While disappointing, the release far exceeds last September and the chances of near-term FED tapering remain on.
Ishaq Siddiqi, market strategist, ETX Capital:
The pace of jobs growth has indeed picked up this year, averaging around 196k per month, up from 189k last year but the market does not think the Fed will be comfortable enough to really let go of QE until more jobs are generated – plus 200k job reports needed until end of year to get the Fed moving on tapering activity.
It’s unwise to say tapering is off the cards in September but it definitely has given the Fed and the market food for thought. QE loving assets are revelling at the prospects for stimulus sticking around a little longer than thought. European stocks add gains, gold rallies up 15 bucks, gilts and bunds also increase as yields ease off recent highs. US stock futures rally, the DJIA up 69 points and S&P500 up 8.25 points.
US dollar weaker, as expected on the prospects of more QE/no tapering yet – the euro edges up against the USD. Wall Street set for a firmer start with investors likely to respond favourably too.