The NFP lottery results are out. The US dollar slipped against many currencies such as the Euro, Swiss franc and British pound when it was reported today that the US unemployment rate jumped to 5.5% in May from 5% percent in April, much worse than the 5.1% expected by most market participants. Not only is the unemployment rate higher than expected, the 0.5 percentage point increase is the biggest one-month gain since February of 1986, and this unemployment rate is at the highest level since October of 2004. With this number in mind, many investors aren't too pleased with the better-than-expected loss of jobs - payroll employment fell by 49,000 jobs in May, compared to the forecast of 60,000 jobs cut. This follows a revised loss of 28,000 jobs in April (- 20,000 jobs originally reported).
Job losses are inevitably underestimated in the federal government stats and they are probably much higher than surveyed, but still, the 5.5% unemployment rate will no doubt affect the sentiment of traders and consumers. We are now staring at the fifth straight months of job losses, and people are wondering again about the R word, that is Recession. Following the NFP release, the White House said that the jobs data is "not a report we wanted to see" although it is consistent with the slowing economy. Can American households withstand the weak job market and still support the economy with their diminishing disposable income? We'll have to wait and see.
Meanwhile, in the currency markets, EUR/USD spiked up to a session high of 1.5704, and if it can break above 1.5720 successfully, it could next aim for 1.5760, then 1.5800-10. 1.5630 is the nearest support. USD/CHF has broken below the symmetrical triangle and hit a low of 1.0250. The British pound also rose against the US dollar, rallying above 1.9600, with 1.9680-1.9700 a possible long profit-taking zone.
In the stock markets, the Dow fell more than 200 points today on the jump in the unemployment rate. American International Group [[aig]] fell more than 5% to post the sharpest decline in the Dow because of an SEC investigation into how the company accounted for credit-default swaps (contracts conceived to protect bondholders against default), including those backed by subprime mortgages.
Grace Cheng is a seasoned traveler who loves collecting points and miles, and is constantly planning where to go next using her miles. She is co-founder and editor-in-chief at GET.com. Email: firstname.lastname@example.org.Editorial Disclosure: Any personal views and opinions expressed by the author in this article are the author's own and do not necessarily reflect the viewpoint of GET.com. The editorial content on this page is not provided by any of the companies mentioned, and has not been reviewed, approved or otherwise endorsed by any of these entities. Opinions expressed here are author's alone, not those of the companies mentioned, and have not been reviewed, approved or otherwise endorsed by any of these entities.
At GET.com it's all about your saving and getting experience. There's nothing more helpful for all of us Getters than a true life experience, a tip or a trick relating to a reviewed product. Read more about comments.