US payrolls rose by just 29,000 as unemployment rate climbed to 4.2%

What happened

The Bureau of Labor Statistics said nonfarm payrolls increased by 29,000 in the latest monthly reading, well short of the 84,000 that had been expected.

The unemployment rate moved up to 4.2% over the same reporting period, pointing to a slower pace of hiring than forecasters had penciled in.

Why it matters

US payrolls and the unemployment rate are among the most closely tracked inputs for expectations around interest rates. A reading that lands away from forecasts can shift how traders price the path of policy, and that repricing tends to move the dollar first, then spread into gold, equity indices and other dollar-denominated assets.

Labor data also feeds views on household income and consumer demand, which matters for cyclical sectors in US stock indices and for oil demand expectations. Because the surprise is in the gap between the actual figure and the forecast, volatility around the release can be larger than the size of the miss alone suggests, and it is often felt in currency pairs such as EUR/USD, GBP/USD and USD/JPY.

What to watch

Further labor market updates and any revisions from the Bureau of Labor Statistics are the next reference points named in the report, alongside how forecasts for upcoming payroll and unemployment readings are set.