06 března 2009

6/3 US Employment Report Commentary

The US Change in Nonfarm Payrolls came out almost exactly in line with Bloomberg expectations at -651k vs. -650k expected, but the previous month's number was actually revised down to -655k from the original -598k reported. That made the January number the worst in 60 years.
Of perhaps more concern was the alarming acceleration in the jobless rate to 8.1% from 7.6% in January. This saw the jobless rate springing above the previous 7.8% high from 1992 and therefore posting a level not seen since 1983. The rate at which Americans are losing their jobs is also of concern, as the 6-month and 12-month accelerations in joblessness are the steepest since the mid-1970's.

Looking at the market reactions, it seems markets are almost immune to the bad US jobs numbers when they are released, as they are largely priced in before the event due to plenty of warning signs already in the pipeline, like the weekly initial jobless claims and the ADP numbers. US S&P futures traded up about a percent about 15 minutes after the release. Previously, the USD seemed to thrive on bad news on safe haven trading, but the initial USD weakening after the release of the figure could be suggesting a change in this pattern.

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