The US dollar fell in value on Friday after an inferior employment report and as the US economy battles to recuperate from the COVID-19 outbreaks and lockdowns.
On Friday morning, the Bureau of Labor Statistics reported the US economy gained 199,000 jobs in December. The increase was nearly half of what economists projected.
Huge miss on the #JobsReport — new hires less than half of expectations, and Real Wages (factoring Inflation) continue to decline as Biden's Stagflation malaise continues, portending a tough 2022 ahead. pic.twitter.com/hhgoZKTtKU
— Steve Cortes (@CortesSteve) January 7, 2022
The jobless rate fell to 3.9 percent, exceeding experts’ forecast of 4.1 percent. According to Axios, the percentage of working adults has not yet recovered to pre-pandemic values, as many people decide to remain out of the labor field.
Companies want to generate new jobs and employ the jobless, pushing down the unemployment rate, Axios reported on Friday.
However, that isn’t going to get more individuals to work. The labor force participation rate of adults remained steady in December at 1.5 percentage points lower than pre-pandemic levels.
The Dollar Index
The data came on the heels of a drop in the buying power of the US dollar, which decreased in value against a basket of foreign currencies.
According to Reuters, the dollar index declined 0.269 percent, to 96.001. Despite Friday’s setback, the dollar was still on course for its first weekly gain in three weeks.
The Euro rose 0.3 percent to $1.1325 against the dollar, following the employment report; after showing little reaction to data, Eurozone inflation jumped to 5% in December.
Policymakers in the Eurozone have stated they anticipate inflation to slow down in 2022 progressively and a rate rise would most likely not be required this year.
The Japanese Yen gained 0.12% against the US dollar, reaching 115.71 per dollar. The Yen suffered the most, while the dollar has recently risen, reaching a five-year high against the Yen earlier in the week.
The pound was last moving at $1.356, up 0.24 percent on the day, despite statistics showing Britain’s construction industry growth slowed in December as the omicron strain of coronavirus surged.
Biden’s Reaction
On Friday, Biden responded to the jobs news by dismissing the low number of new jobs created and instead concentrating on the rate of unemployment.
According to Fox Business, Biden stated today is a watershed moment for the nation’s economy.
“Today’s federal unemployment rate dropped below 4% to 3.9 percent, the biggest one-year decline in unemployment in US history. Years quicker than analysts predicted, we’ve added 6.4 million new jobs since January of last year.”
Nothing new here ~ ~ Biden shrugs off worst jobs report of his presidency; critics say he botched the economy https://t.co/AYS6Da2js1 pic.twitter.com/4Sjepjf9uu
— SgtPepper1964 (@SPepper1964) January 8, 2022
Biden further boasted since assuming office in January 2021, the United States had “gone from 20 million individuals on the jobless rolls to under two million on the jobless rolls today.”
The president remarked, “This is the GDP I envisioned and aspired for the people of the United States. The greatest rewards go to those who work the hardest and are frequently left behind.”
Republicans continue to pan Biden for the real damage he’s done to the economy since getting in office.
