The release overnight of the US jobs report for September has seen the A$ fall almost a full US cent. The non-farm payrolls for Sept saw a strong increase of 248,000 (above expectations) combined with large upward revisions to the data for July and August (combined revisions added another 69,000). The unemployment rate in the US has now fallen to a 6 year low of 5.9% (from 6.1% in August).
Dampening the news somewhat was the fact that the Participation Rate once again fell, this time to 62.7 (from 62.8). To put this figure in some context we need to bear in mind that participation in the US in the years pre-GFC was running at about 66. This was a similar level to here in Australia at that time. The large decline in US participation has greatly assisted in pushing the unemployment rate down, while in Australia participation, although slightly weaker than pre-GFC, has fallen nowhere near as far and as a result we have seen our unemployment rate rise (currently at 6.1%). Those contrasting a sub-6% unemployment rate in the US with our own situation need to to bear that (significant) difference in mind.
News of the strong jobs data boosted talk of a rate hike in the US sooner rather than later and, as a result, the US$ rallied strongly. The A$ fell by almost a full US cent and is presently trading around US$0.867