The Big Picture – Non Farm Payroll Report May 9/08
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Everybody is breathing a little easier now that the non-farm payroll (NFP) number came in better than expected last Friday (May 2, 2008). That said, April was the fourth month of reported job losses in the U.S. since the beginning of 2008 – the longest string of job losses since the five-month stretch in 2003. In April, 20,000 jobs were lost - far less than the previous months. April was also a good month in terms of unemployment stats. The rate fell to 5% from 5.1 in March. The big picture, of course, is the loss of some 321,000 jobs since 2008 began.
On the flip side, the economy grew ever so slightly during the first quarter, and factory orders remained sufficient to convince economists that the economy is at least treading water (even though inventories of manufactured goods appear to be climbing). Flies in the ointment are rising oil prices and strained corporate earnings. Bonds reacted negatively to last Friday’s NFP report, as traders began guessing that the Fed may put a hold on interest rate cuts. Looking at the daily commodities futures chart for the U.S. dollar, the dollar has been trending up since putting in a double bottom between March and April, and it obviously reacted well to last Friday’s NFP news.
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