GBP
Producer Price Index (PPI) Input rose 0.1% for the month of December 2009. Further, “Input price annual inflation rose 6.9 per cent in December compared to a rise of 4.0 per cent in November.”
PPI is seen as a leading indicator for consumer inflation as costs as passed on from producers to consumers. The GBP rallied in the run up to the news, though retraced afterwards.
USD
Non-farm Employment Change reported a loss of 85,000 jobs for the month of December 2009, worse than the expected -3,000. Employment fell in construction, manufacturing, and wholesale trade, while temporary help services and health care added jobs.
The Unemployment Rate showed no changed and remained at 10.0%, slightly beating expectations of 10.1%. The U-6 report, which doesn’t define unemployment as narrowly as the normal U-3 report, came in at 17.3% unemployment.
Stocks dropped and the USD fell, not the normal correlation, on the higher than expected job losses. Markets are showing concern over the fact that unemployment, despite all of the stimulus, may hold back a recovery.
