NFP: The worst report is the best for the US dollar

The worst jobs report is even uglier, according to FXStreet’s analyst Yohay Elam. The US dollar could advance.

Key quotes

“The worst Nonfarm Payrolls report in history – 20.5 jobs lost and an unemployment rate of 14.7% – is shocking but investors were already bracing for disaster.”

“The participation rate had already tumbled from 63.4% to 62.7% in March and has now extended its fall to 60.2%. That means that the calculation of the unemployment rate is skewed to the upside.” 

“Better estimates include the U-6 or ‘real unemployment rate’ – which had already leaped to 8.7% in March and is now 22.8% – and the broadest measure, the employment to population ratio, which stood at 60% in March and is now only 51.3%.”

“Stocks may suffer from deteriorating prospects for the US and global economies while the safe-haven US dollar has room to rise – when the US coughs, the world catches a severe sickness.”