The May non-farm payrolls report was released at 20:30 on Friday. The U.S. May quarterly non-farm payrolls recorded an increase of 559,000, lower than the expected 650,000; at the same time, the U.S. unemployment rate in May recorded 5.8%, a new low since March last year.
After the data was released, the dollar fell slightly; spot gold briefly rose $8 and broke through the $1880 barrier. comex most active gold futures contract 20:30 Beijing time on June 4 within a minute of buying and selling plate instantly traded 4459 lots, trading contracts worth a total of $838 million. However, a few minutes later, some of the selling orders appeared and gold prices retreated briefly.
Other non-U.S. currencies also moved differently. Due to the Canadian employment data is less than expected, the U.S. dollar fell 20 points against the Canadian dollar; the euro against the U.S. dollar short term higher nearly 30 points, now at 1.2147; the pound against the dollar short term up nearly 40 points, now at 1.4170.
Meanwhile, U.S. stock index futures rose, with the Nasdaq futures expanding to 0.5%.
The number of non-farm payrolls added jobs in April was revised upward to 278,000 from 266,000; the number of non-farm payrolls added jobs in March was revised upward to 785,000 from 770,000. The U.S. Bureau of Labor Statistics said that after the revision, the total number of new jobs in March and April is higher than the previously reported 27,000.
Market Commentary: Reduce the possibility of QE tapering, but this subdivision needs to be concerned
This report contradicts the small non-farm payrolls data released the day before. This also confirms the earlier report of Golden Ten: the current degree of contradiction in the U.S. job market signals reached an “unprecedented” degree.
Analyst Chris Anstey pointed out that initial indications are that the jobs report is not too good, but not too bad either. No doubt the White House will tout a rebound in job growth from April, almost twice as much as in April, and a drop in the unemployment rate to a post-outbreak low. But the drop in the participation rate and the continued spike in hourly wages suggest that employers are having a hard time finding workers. On the other hand, the hourly earnings data look quite high, fueling the “worker shortage” and inflation narrative.
U.S. employers increased hiring in May as the easing of the epidemic, aided by vaccinations, brought more people back into the workforce, providing reassurance that the economy is recovering from the new recessionary epidemic. Improved public health and a massive fiscal stimulus are bolstering the economy, and CDC data show that at least half of Americans have been fully vaccinated against the new crown.
As for why this report is blowing up?
Analyst Catarina Saraiva mentioned that the drop in the unemployment rate was accompanied by a slight drop in the participation rate. This may be due to some people dropping out of the labor force altogether. The leisure and hospitality industry added 292,000 jobs in May. About two-thirds of those were in the food and beverage sector. Entertainment and lodging jobs also rose sharply, but employment in this sector is now down 15 percent from pre-pandemic levels and remains the largest gap between employment and pre-pandemic levels of any industry.
An overall improvement in the labor market will require faster job growth in service providers such as the leisure and hospitality industry, which suffered a long period of disruption due to the New Crown crisis. However, the job recovery may remain bumpy as factors such as increased unemployment benefits, skill mismatches and supply shortages continue to impede hiring.
That said, some analysts have pointed out that the Fed is unlikely to interpret this data, particularly the decline in the labor force participation rate, as substantial progress in closing labor market gaps. On the surface, however, this reduces the likelihood of tapering the size of bond purchases in the near term. Previously Citi also predicted that if the number of new non-farm payrolls recorded near or below 500,000, the Fed is expected to postpone relevant discussions until its annual meeting in Jackson Hole in late August.
Pay close attention to Biden’s speech tonight
President Joe Biden will speak at 10:15 local time (22:15 GMT) on the May nonfarm payrolls report, and investors can pay close attention.
The poor non-farm payrolls report could play right into the hands of Republicans, who have repeatedly criticized Biden’s stimulus bill as a “lie-flat welfare bill” that suppresses the willingness of job seekers, and Biden is expected to respond on this point.
Many states have announced that they will end federal unemployment assistance before it expires on Sept. 6, in as little as two weeks, and most of these states are led by Republicans. So, for many Americans who don’t go looking for work during the epidemic, and who rely on unemployment benefits alone for a leisurely existence, the good times may be coming to an end.