A June rate rise can now surely be ruled out

US unemployment data are notoriously noisy. They are maddeningly prone to huge revisions, and many in the market complain that the monthly ritual of waiting for the Bureau of Labor Statistics to speak is an overblown anachronism.

All that said, sadly there is ample reason to take seriously the April number on non-farm payrolls, the biggest negative surprise compared to market expectations since December 2009. This in turn has profound implications for the question that has preoccupied markets for months now: when will the Federal Reserve finally start to raise interest rates.

A rise in June - still just about possible given the rubric unveiled by Janet Yellen last month - can now surely be ruled out. September now is the earliest possible date, and now looks unlikely. Even that will require a clear-cut recovery over the spring and summer. The Fed wants to raise rates, but it is telling the truth when it says it is led by the data.

As for the data, the unemployment numbers had looked increasingly like an outlier for months, as other figures painted a picture of far more muted US growth. Look, for example, at this month's ISM supply manager survey of manufacturing. Data are available for many countries, and all are handily set with a scale where numbers above 50 indicate growth, and below it suggest recession. This allows direct comparisons.

On that basis, the US is slowing sharply. At 58 late last year, it has now dropped to 51.5. That puts it behind Germany and the eurozone, and far behind the UK and Spain, with ISM numbers above 54.

All of this suggests that the latest revisions in non-farm payrolls, which revised down previous estimates by 69,000 jobs, have left us with a more accurate picture of the US jobs market. That still leaves an unemployment rate of 5.5 per cent; a respectable number that does not require emergency-level low interest rates. But in combination with negligible inflation, and inflationary pressure from rising wages that still looks very weak, there is little compulsion to raise rates either.

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The most important market implication is for the dollar, whose long rally is finally under serious pressure. Round numbers, chart patterns and psychological barriers should not matter, but they do. Friday's instant reaction brought the dollar above $1.10 to the euro. On a trade-weighted basis, it brought it within a whisker of its 50-day moving average, a measure of the short-term trend that averages its level over the last 50 days.

The dollar's rise has been so sharp and consistent that it has traded above its 50-day average without a break since July last year. Another downward move to take it below the trend would have an impact on trader psychology.

How much is hanging on a stronger dollar? It has certainly aided the renaissance in European stocks in recent months, and driven severe pain for many emerging markets. An end to the dollar rally might temper those trends.

A message of "lower rates for longer" will also affect stocks. The yield on 10-year treasuries briefly returned to 1.8 per cent after the news - a level that many would have regarded as impossible a year ago. Rates this low should continue to be a formidable support for the US stock market.

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