A Tale of Two Numbers
Today’s Spotlight Market
Friday?s release of non-farm payrolls for May showed two very different numbers. 38,000 jobs were created in May, which is far below the estimates of 160,000 – 170,000. However, the unemployment rate came in at a very healthy 4.7%. These figures also differed greatly from the ADP private sector jobs report, which showed an increase of 173,000 jobs for May.
Fundamentals
When interpreting the payroll jobs number, one thing traders should be cautious of is that these numbers are often revised substantially. In September of 2011, the Bureau of Labor Statistics stunned traders by releasing a report that showed job growth for August 2011 was zero.? In the next two subsequent months, however, that figure was revised upward. The first revision was? to 57,000 jobs created, and then that was revised to 104,000 jobs created. Quite a difference from zero jobs! The divergence between the low number of jobs created and the sharp drop in the unemployment rate also should be taken into consideration. The unemployment rate and number of jobs created are from two different surveys.
Technical Notes? -? View Today’s Chart
US 30-year bond prices jumped Friday on the unemployment news, blasting right through the previous resistance level of 167-0. A previous resistance level often becomes a support level, so traders will likely keep an eye on this number. Bond prices have been quite choppy as of the past 3 months, as each economic data release has Fed watchers reacting quickly. However, the overall trend is very slightly bullish, as the 20-day Simple Moving Average (SMA) is just slightly above the 50-day SMA. 14-day Relative Strength Index (RSI) is also mildly bullish at 57.29.
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