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Friday, June 6, 2008

Unemployment Rate Jumps, (Possibly) Saves Bears

It’s still early but it looks like the Bears were saved by the largest jump in the unemployment rate since 1986... from 5.1% to 5.5%.

  • The U.S. lost jobs in May for a fifth month.
  • Payrolls fell by 49,000, a smaller decline than forecast, after a 28,000 drop in April that was more than initially reported.
  • The unemployment rate increased to 5.5 percent from 5 percent, the biggest jump since February 1986, signaling the world's largest economy is stalling.
  • Payrolls shrank by 324,000 workers in the first five months of the year.
  • The number of Americans receiving jobless benefits surpassed 3.1 million in May for the first time in four years, indicating employees that are being let go are having a more difficult time finding new jobs.
  • Consumer confidence last month sank to the lowest level in more than 15 years as the employment outlook deteriorated, according to a report from the Conference Board, a New York research group.

U.S. Payrolls Fell 49,000 in May, Jobless Rate Jumps to 5.5%: “The U.S. lost jobs in May for a fifth month and the unemployment rate rose by the most in more than two decades, signaling the world's largest economy is stalling.

Payrolls fell by 49,000, a smaller decline than forecast, after a 28,000 drop in April that was more than initially reported, the Labor Department said today in Washington. The jobless rate increased to 5.5 percent from 5 percent, the biggest jump since February 1986.”

The S&P 500 came off quickly pre-market on the news from an overnight high of 1411. Today is an absolutely critical day for the Bears. A close anywhere above 1400 would make it damn near impossible to maintain a Bearish posture in these markets.

Anybody else notice that oil went from $122 to $132 in two days? A 8% move in two days, done with such ease, will likely to result in a move to new record highs… and equities managed to stay bid.

Crazy. Just crazy.

9 comments:

Richard Jennings said...

Yes unemployment is up but you are not a statistic and there are still thousands of 75K, 100K and 150K jobs out there. try these sites:

http://www.realmatch.com
http://www.monster.com
http://www.hotjobs.com

I believe that if you truly want and try to find a good job, you just will.

Ben Bittrolff said...

Richard Jennings

"I believe that if you truly want and try to find a good job, you just will."

I don't even know what to say to that... except that if the jobs were there and you could get them, unemployment wouldn't have had the largest jump since 1986.

Mista B said...

Ninja,

Don't you get tired of being right all the time with respect to the market? I've been following your site for a while now. Great analysis. Great calls. Keep it up!

Ben Bittrolff said...

mista b,

Right all the time? Ha! I wish.

Brian B. said...

I day trade only and as such only follow macro events out of curiosity. However, with yesterdays action, I really thought after a day of consolidation that it was going to push higher to stop out the rest of the bears. 1450 ish s/p. Today caught alot of people offsides. Yesterdays swing longs are screwed already. Any immidiate push down further and nice margin call time. Still looking for that 1020 level eventually.

IIO said...

Sometimes I wonder whether events like the increase in unemployment really cause the market to drop, or is the market fated to drop anyway and just looking for an excuse.

With the divergences between the s&p and nasdaq, I kind of feel it was bound to happen. The rebound in oil didn't help either.

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