April Nonfarm Payrolls disappoints

Non-farm and private sector employment fall short of expectations, signaling a slower-than-anticipated pace of job creation.

By Farah Mourad | 3 May 2024

Market close
  • Odds of a Federal Reserve rate cut in September surge following the NFP release

  • Gold price rally above $2,300 as investors anticipate potential Fed rate cuts

  • The Japanese yen strengthens against the US dollar

The latest US Nonfarm Payrolls (NFP) report for April has garnered attention across various markets due to significant deviations from expectations, setting off a series of reactions.

In terms of employment figures, the change in non-farm employment stood at 175 thousand, falling short of the anticipated 245 thousand and notably lower than the previous month's figure of 303 thousand. Similarly, the change in private sector employment reported 167 thousand jobs, below the expected 180 thousand and the previous 232 thousand.

Average hourly wages, a crucial indicator, displayed a slight dip from expectations. On an annualized basis, it currently stands at 3.9%, slightly under the expected 4% and down from the previous month's 4.1%. Additionally, average hourly wages by month showed a smaller increase than forecasted, currently at 0.2% compared to the expected 0.3% and the previous month's 0.3%.

The unemployment rate, currently at 3.9%, was also slightly higher than the expected 3.8% year-on-year, remaining unchanged from the previous month's rate.

The disappointing performance of the data has prompted shifts in various financial markets. With many investment banks expecting more robust figures, the odds of a rate cut by the US Federal Reserve in September have risen significantly, as indicated by US Fed funds futures. These odds surged to 78% post-employment data, compared to 63% prior to its release.


There has been a notable impact on currency markets, particularly seen in the appreciation of the Japanese yen against the US dollar. The USDJPY pair has experienced a decline of nearly 1.2%, reflecting the market's reaction to the weaker-than-expected NFP report.

Precious Metals

One asset class that has shown a bullish response amidst the NFP disappointment is precious metals, notably gold. Following the release of the below-expectations NFP report, gold prices surged above the $2,300 mark on Friday. This surge in gold prices is attributed to the perception that the Federal Reserve may be inclined to implement interest rate cuts sooner than previously anticipated. Lower interest rates typically make gold more appealing to investors due to its status as a non-yielding asset.

Overall, the April NFP report paints a picture of sluggishness in the US labor market, prompting speculation about the Federal Reserve's future monetary policy actions and influencing trading dynamics across various financial instruments.