US Jobs Situation Report Damaging, Virtually No Jobs Created in May

US Jobs Situation Report Damaging, Virtually No Jobs Created in May

US Jobs Situation Report Damaging, Virtually No Jobs Created in May

$DIA, $SPY, $QQQ, $VXX

Donald Trump said the surprisingly weak US jobs situation data for May released on Friday was “terrible”, a “bombshell.”

“Terrible jobs report just reported. Only 38,000 jobs added. Bombshell!” Trump said in a post on Twitter shortly after the US government released the data.

The US economy created the fewest number of jobs in more than 5 years in May pointing to labor market weakness that could make it difficult for the US Fed to raise interest rates at all this year.

NFPs (Nonfarm payrolls) increased by only 38,000 jobs last month, the smallest gain since September 2010 (virtually no jobs were created), the Labor Department said Friday. And the March and April revisions were bad as well, as 59,000 fewer workers were hired in March and April.

The goods producing sector, which includes mining and manufacturing, shed 36,000 jobs, the most since February 2010.

The jobless rate fell to 4.7% in May, the lowest since November 2007. The decrease in the unemployment rate was in part due to a people dropping out of the labor force, meaning that real US unemployment is nearly 20%.

Recession looms…

Fully 81 economists polled by Bloomberg had forecast payrolls rising 164,000 in May.

US Fed Chairwoman Janet Yellen has said monthly gains of at least 100,000 NFPs are needed to keep up with growth in the work-age population. The US central bank has signaled its intention to raise rates soon if job gains continued and economic data remained consistent with a pickup in growth in Q-2.

The CME fed funds futures at showing that 62% traders are betting that there will be no rate hike until November and 54% betting not till December. Notably, Chicago Fed President Charles is quietly saying it will be a very long time before the Fed can/should hike interest rates.

All of the above ‘Spooked” the markets Friday.

Friday, the US major stock market indexes finished at: DJIA -31.50 at 17807.06, NAS Comp -28.85 at 4942.52, S&P 500-6.13 at 2099.13

Volume: Trade was above average with about 890-M/shares exchanged on the NYSE:

  • S&P 500 +2.7% YTD
  • Russell 2000 +2.5% YTD
  • DJIA +2.2% YTD
  • NAS Comp -1.3% YTD
HeffX-LTN Analysis for DIA: Overall Short Intermediate Long
Bullish (0.28) Neutral (0.19) Bullish (0.25) Bullish (0.42)
HeffX-LTN Analysis for SPY: Overall Short Intermediate Long
Neutral (0.15) Neutral (0.04) Neutral (0.19) Neutral (0.21)
HeffX-LTN Analysis for QQQ:  Overall Short Intermediate Long
Neutral (0.19) Bullish (0.29) Neutral (0.19) Neutral (0.10)
HeffX-LTN Analysis for VXX:  Overall Short Intermediate Long
Bearish (-0.34) Bearish (-0.48) Bearish (-0.39) Neutral (-0.17)

Have a terrific weekend…

 

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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