Unemployment now stands at 9.4%, up from 8.9%

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cat233
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Joined: Aug 20 2008
Posts: 575
Unemployment now stands at 9.4%, up from 8.9%

May Unemployment Rate 9.4% vs 9.2% consensus

May Nonfarm Payrolls -345K vs -520K consensus, prior revised to -504K from -539K

May Average Hourly Earnings M/M +0.1% vs +0.1% consensus, prior +0.1%

May Average Hourly Earnings Y/Y +3.1% vs +3.1% consensus, prior +3.2%

May Average Hourly Earnings M/M +0.1% vs +0.1% consensus, prior +0.1%

Source:  Briefing

cat233's picture
cat233
Status: Platinum Member (Offline)
Joined: Aug 20 2008
Posts: 575
Re: Unemployment now stands at 9.4%, up from 8.9%

The market got a kick out of the May employment report, as it cheered the news that "only" 345K nonfarm payroll jobs were lost during the month. That was indeed much better than the consensus estimate of -520K. Moreover, the April nonfarm payrolls data was revised up to show a decline of -504K positions versus an originally reported -539K... The other headline that jumps out is the unemployment rate, which spiked to 9.4% from 8.9% and is at its highest level since 1983. The big uptick is owed in part to an increase in the civilian labor force, meaning there were more people looking for jobs. That is being read in counter-intuitive fashion, though, as a sign that it reflects increasing confidence in the economic recovery... Hourly earnings increased 0.1% as expected, yet the average workweek dipped to 33.1 hours from 33.2 hours, which isn't a great portent for a pickup in hiring. By the same token, the -0.2% decline in the manufacturing workweek isn't a great portent for a pickup in industrial production... By sector, job losses were seen in every category with the exception of education and health services (+44K) and leisure and hospitality (+3K). The manufacturing sector saw 156K job losses in May... The market has taken off with the nonfarm payrolls number, which isn't surprising since traders typically react to cursory headlines. This report, however, doesn't contain good economic news. From the drop in the workweek, which suggests hiring isn't likely to pick up to any meaningful degree soon, to the unemployment rate, which left the 2009 average rate at 8.48% and above the 8.1% average factored in the White House deficit projection for FY09, to the increased rates of long-term unemployment and increased rates of underemployment, the May report doesn't set a good stage for a meaningful pickup in consumer spending, even if it sets the stage for an opening rally.

source:  briefing.com

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