May Employment Report
Change in Nonfarm: +69k vs. 150k expected
Change in Private: +82k vs. +164k expected
Unemployment Rate: 8.2% vs. 8.1% expected
Avg hourly earnings: .1% vs .2% expected
Hours worked down to 34.4
In addition to the dismal gain in Nonfarm Payrolls in May of only 69k, we saw downward revisions of 49k to last month’s gain. The headline unemployment rate grew to 8.2% from 8.1% in April. Very disappointing report showing that the US economy is still struggling. Large moves in the markets post-payrolls, as Fannie 3.5s were nearly ½ point higher at one point. 10yr yields continue to set historic lows, currently under 1.50% at 1.44%. This definitely puts the fed in play for the June meeting.
With the probability of QE3 somewhere around 80%, seeing outright buying of Fannie 3s from hedge funds. Fannie 3s are now trading north of 103-00. Stocks are getting pummeled globally, with the DOW losing 190 points before the open.