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Dollar sags as strong US jobs report masks flat wages
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[NEW YORK] The dollar fell against the euro and the yen Friday after an otherwise buoyant US December jobs report showed wages sagging even as the unemployment rate fell to 5.6 per cent.
The greenback reversed course from recent gains as the slowdown in wage growth in December to 1.7 per cent year-on-year, barely keeping up with inflation, pointed to some frailty in consumer spending power.
Analysts also took that as a possible pointer to the Federal Reserve taking its time on raising interest rates this year, against some expectations prior to the report that an initial hike from the zero level could come as early as April.
At 2200 GMT, the dollar traded at US$1.1842 per euro, and 118.46 yen.
"Wage data was actually the most discouraging aspect of this report, insofar as real wage growth has fallen, another sign that inflation pressures are abating," said Christopher Vecchio, currency analyst at DailyFX.
"The Fed has stated its desire to see wage growth accelerate before it tightens policy; but it was also made clear in the December (meeting) minutes this week that rate hikes could occur even if inflation is floundering."