Friends
There is really only one way to describe the jobs data that was released this morning- TERRIBLE. Instead of the 158,000 new jobs that were expected to have been created in May, there were only 38,000 new jobs created. Yikes. Not only that, but previous months jobs numbers were revised down. The unemployment rate dropped to 4.7% so that is good, right? Umm, no. The reason the unemployment rate dropped was that the participation rate dropped. In other words after some progress in recent months it appears that previous job seekers are simply falling off the radar-giving up looking for a job. So if the number of people looking for jobs decreases the numerator in the equation decreases giving the false appearance that the jobs are being acquired- thus the unemployment rate drops.
The markets had to hate this news right? Well, not really. Bonds rallied (not surprising) sending rates lower, but stocks, after an early morning selloff, erased most of the losses as the trading session wore on. The recent belief that the Fed was sure to raise rates in June or at least in July, quickly dissipated sparking the old paradigm that “bad news is ok because it keeps the Fed at bay” (hey I think that rhymes).
By the close the Dow Jones Industrial Average was down 31 points to finish the day at 17,807. The S&P 500 was down 6 points to close at 2099. Gold was up $32 to trade at $1,245 per ounce, while oil was down $.41 to trade at $48.76 per barrel WTI.
Wow, after the big build up that was leading into this months Fed meeting, the wind has been taken out of the sails of the idea that the economy was strong (a view being espoused by Fed officials) and that the Fed was going to raise rates in June. That was abruptly dismissed by today’s dreadful employment report.
Let’s catch our breath, hope the rain finally stops and get back at it next week.
