The nonfarm payroll numbers came in earlier today, and to say the numbers aren’t good is an understatement.
Only 38,000 new jobs were created in the month of May, the least amount of jobs created since September of 2010. To make matters worse, Bloomberg surveyed a number of economists who estimated a gain of 160,000 new jobs. Which means the country missed the estimated mark by a whopping 120,000 jobs.
And that’s not even all the bad news.
Revised jobs numbers for March and April came out as well. March numbers were revised down by 22,000 and April was brought down by 37,000. This means a total of 59,000 jobs were taken away from what we thought were created.
“It will put a dent in optimism about the second-quarter rebound,” Thomas Costerg, senior economist at Standard Chartered Bank in New York, said before the report. “A lot of hopes are hanging on the labor market. If job growth softens it’ll be a signal that the U.S. economy is a bit more fragile than we think. There are a lot of question marks about the second half.”
Reaction to the numbers are what you would expect: The dollar has plummeted in comparison to the rest of the world’s economies, and the NYSE will surely end lower as a result. This also puts a serious dent in the Federal Reserve’s plans for a potential interest rate hike coming later this month. All signs had been pointing to an interest rate hike as the economy was looking like it was rebounding. However, in light of these numbers (and the revisions from the last couple months), the rate hike looks to be in serious doubt.
Was the news all bad?
Not wholly. Average earnings were up by .2 percent, increasing wage’s winning streak to three months in a row. Overall, worker pay has increased two and a half percent over the course of a year.
Look to see a lot of blue candlesticks in the upcoming days following this announcement. Don’t know what candlesticks are or how to read them? Worry not, you can learn everything you need by downloading the FREE Candlestick Cheat Sheet.