Equity markets initially reacted negatively hearing the headline number for the change in nonfarm payrolls at a loss of 95,000 against the -5,000 expectation. Notably, private payrolls increased by 64,000 versus the 75,000 anticipated. The unemployment rate ticked down to 9.6% from 9.7%. Gold rallied off the number while the dollar weakened.
The markets’ moves have not been overly drastic as there seems to be a broad acceptance that the economy is slowly recovering albeit feeling somewhat stagnant. The big question is whether the Federal Reserve will begin QE 2.0. While the Fed announced its willingness to continue easing as in the last FOMC statement, they have yet to layout any formal plans. The dollar and gold seem to be clearly pricing this in.
