Instant Insight: Payrolls
Falls Less Than Half of Expectations - Forex Market
Friday, 03 June 2005 GMT - Written
by Kathy Lien, Chief Strategist at dailyfx.com
The US economy may not be as rosy
as you may think! Non-farm payrolls only increased 78k
in May, less than half of expectations and below a third
of the job growth that we saw in April. In fact, this
low-balled even the most pessimistic forecast posted
on Bloomberg and is the weakest in 2 years. This tells
us that it is almost time to say goodbye to rate hikes
as we enter the infamous "9th inning" coined
by Fed President Fisher.
The direction of the surprise is not surprising, since
we put out a report yesterday talking about how 175k
will be a tough hurdle. However the rally in the euro
post NFPs has been disappointing. Weak jobless claims
this month, a sharp surge in planned layoffs according
to the Challenger report and the drag from the manufacturing
sector all contributed to weakness. However, the drag
from the manufacturing sector (-7k) wasn’t that
much more than the drag back in April, which indicates
that our only hope for strength, which is the service
sector is also faltering.
The unemployment rate fell to 5.1% from 5.2% while average
hourly earnings growth slowed to 0.2% from 0.3%. Average
weekly remained steady at 33.8 after a downward revision
in April.
Last Updated ( Friday, 03 June 2005 )
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