Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Silver Bull Market Update - 7th Aug 20
This Inflation-Adjusted Silver Chart Tells An Interesting Story - 7th Aug 20
The Great American Housing Boom Has Begun - 7th Aug 20
NATURAL GAS BEGINS UPSIDE BREAKOUT MOVE - 7th Aug 20
Know About Lotteries With The Best Odds Of Winning - 7th Aug 20
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

Why the Markets Really Loved the Bad U.S. Jobs Report

Stock-Markets / Financial Markets 2013 Jun 10, 2013 - 04:01 PM GMT

By: Money_Morning

Stock-Markets

Diane Alter writes: When bad news is good news for stock markets you know just how convoluted the current economic environment is.

According to the May jobs report out today (Friday), the U.S. unemployment rate ticked up to 7.6% in May from 7.5% in April, the first increase since the start of 2013. And, markets rallied on the news. The Dow Jones soared more than 200 points by mid-day.


Some will say the May jobs report was good news - thousands of out-of-work people returned to the work force, and the 175,000 jobs added beat expectations.

The reality is we're just treading water. And the labor force participation rate is still at 30-year lows.

But the real good news is the jobs report means more U.S. Federal Reserve support, which will fuel markets already hitting record highs.

"It's a decent report but it's not by any means robust," Conrad DeQuadros, senior economist at research firm RDQ Economics told The New York Times. "It's certainly not strong enough to get the Fed to make any significant changes at its meeting in June."

Friday's Labor Department report came at a time when the Fed is seriously mulling whether job creation is solid enough to start tapping the breaks on its market stimulating $85-billion-a-month asset purchase program. The "decent" showing means the Fed is apt to keep its foot on the pedal for at least a few more months. Some economists say even into 2014.

The Fed has pledged it won't stop quantitative easing until the unemployment rate hits 6.5%.

Billed as the most important jobs report in years, the May numbers were really quite dull. But the data was vital in determining the Federal Open Market Committee's (FOMC) future moves.

"These days, the specifics of the report are far less important to our clients than is the effect it may or may not have on Fed activity," Dan Greenhaus, chief global strategist at BTIG told the Financial Times. "It does nothing to change the broader view that the Fed is set to steadily reduce its pace of asset purchases at the September meeting and that all else equal, good news should be taken as good news."

Bad News in the May Jobs Report

The reality is jobs are still scarce.

Today's jobs report showed some 11.8 million workers who were actively seeking work in May couldn't find a job.

The unemployment rate rose to 7.6% because the labor force grew by 420,000, making it that much harder to find a job.

A broader measure of unemployment, which reflects the number of discouraged workers and those forced to work part-time, is a lofty 13.8%

Job growth last month was concentrated in services sectors such as professional and businesses services, retail, and fast food services and restaurants. The mirrored the familiar pattern over the last several months in which many new jobs being created are low paying. Over the past year, gains in the later category total 337,000 new jobs.

Federal payrolls shed 14,000 jobs, bringing the total number of U.S. government jobs lost in the last three months to 45,000.

The numbers don't reflect the furloughs many federal employees are facing. The Pentagon plans to furlough 680,000 civilian workers starting in early July. Most workers will lose one paid day a week.

Average weekly hours and average hourly earnings showed scant improvement, as has been the case in recent months.

The Hidden Dangers in May Jobs Report

But here's what today's jobs report really says about the economy...

Workers are getting hired at a snail's pace.

Companies continue to take fewer risks. Instead of expanding payrolls, they are keeping cash on hand - 5.7% at the end of 2012 up from 3% three decades earlier, the Federal Reserve reports.

Until the pace of the economic recovery picks up steam and factories ramp up production, jobs will remain in short supply.

Consider, the employment-to-population ratio has stayed almost constant at 58.5%, well below the pre-recession peak. But the size of the working age population has grown. Moreover, scores of people are delaying retirement.

Getting the unemployed back to work is imperative to long-run growth. The more time workers spend idled, the more their skills erode, dragging down the economy's potential.

And despite the Fed's aggressive efforts, its measures have not been particularly effective at stimulating job growth.

Source :http://moneymorning.com/2013/06/07/todays-may-jobs-report-when-bad-news-is-good-news/

Money Morning/The Money Map Report

©2013 Monument Street Publishing. All Rights Reserved. Protected by copyright laws of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including on the world wide web), of content from this website, in whole or in part, is strictly prohibited without the express written permission of Monument Street Publishing. 105 West Monument Street, Baltimore MD 21201, Email: customerservice@moneymorning.com

Disclaimer: Nothing published by Money Morning should be considered personalized investment advice. Although our employees may answer your general customer service questions, they are not licensed under securities laws to address your particular investment situation. No communication by our employees to you should be deemed as personalized investent advice. We expressly forbid our writers from having a financial interest in any security recommended to our readers. All of our employees and agents must wait 24 hours after on-line publication, or after the mailing of printed-only publication prior to following an initial recommendation. Any investments recommended by Money Morning should be made only after consulting with your investment advisor and only after reviewing the prospectus or financial statements of the company.

Money Morning Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules