?Get A Job!?
Today’s Spotlight Market
Overshadowed by the February payrolls data was the release of the U.S. trade deficit figures for January. The Commerce Department reported that the trade deficit fell to a seasonally adjusted $41.74 billion in January. December?s deficit was also revised lower to $45.60 billion. Both imports and exports fell in January, with declines of 2.9% and 3.9% respectively, and Crude Oil imports accounting for the bulk of the decline in imports for January.
Fundamentals
The 1950?s hit song by the Silhouettes ?Get a Job? could be changed to ?Got a Job? if one is to believe the recent employment data. On Friday, the Labor Department announced that U.S. non-farm payrolls rose by 295,000 in February, or 55,000 more than pre-report estimates. In addition, the unemployment rate fell by a larger than expected 0.2% to 5.5%. Private payrolls once again made up the bulk of jobs created last month, with a gain of 288,000. The leisure and hospitality sectors, as well as the professional and business services sectors led in total jobs created, however the widely watched manufacturing sector saw only 8,000 new jobs in February. While the headline figures were impressive, we should note that January?s payrolls were revised downward by 18,000 jobs. Also, while employment increased last month, workers? paychecks are not yet seeing the benefits of a tighter labor market, as average hours worked in February remained unchanged at 34.6 hours, and average hourly earnings rose a modest $0.03 to $24.78. This 2% gain in hourly earnings is in line with gains seen for most of the last 4 years. The real question on traders? minds is whether Friday?s employment data is enough to keep the Fed on pace to finally raise interest rates at the June FOMC meeting, or if the Fed will remain very cautious and wait for evidence that inflation is finally starting to tick upward prior to enacting a rate hike.?? ?
Technical Notes? – View Today’s Chart
Looking at the daily continuation chart for 10-year Note futures, we notice prices falling below the 200-day moving average for the first time since October of last year following the much better than expected payrolls data for February. The 14-day RSI has turned very weak and is approaching oversold levels, with a current reading of 32.87. The December 8th low of 125-17.5 is seen as the next support level, with the major support level not found until 123-16. Resistance is found at 129-01.
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