Few Surprises In June Non-Farm Payrolls Report
Today’s Spotlight Market
Our neighbors to the north also saw jobs increase in May, although once again ?the devil is in the details?. Statistics Canada reported 28,500 jobs were created in May, which was a big improvement from the 28,900 jobs lost in April. However, part-time jobs were solely responsible for the increase, with 54,900 jobs added. Full time employment continues to face headwinds, with a loss of 29,100 jobs in May. The Canadian Dollar was little changed following the employment report.
Fundamentals
?Slow and steady? best describes the pace of job creation in the U.S. following another uneventful Non-Farm Payrolls report. The Labor Department reported the U.S. economy created 217,000 jobs in May, which was in line with the pre-report estimate of 210,000 jobs added last month. The unemployment rate held steady at 6.3%, matching the lowest unemployment rate since the end of the 3rd quarter of 2008. However, the quality of jobs being created still leaves a lot to be desired. Service-sector jobs, which are generally lower paying, led the way, with 39,000 jobs added in May, while the widely-watched manufacturing sector saw employment increase by 10,000 jobs. Average hourly earnings increased by a modest $0.05 to $24.38, which shows that wage inflation is nearly non-existent.
The reaction by financial markets was modest following the report, with the S&P 500 up less than one-half of one percent and 10-year Note yields falling moderately to 2.554% as of this writing. Traders believe recent economic data, including the employment picture, will do little to sway the Federal Reserve from its outlook for the economy and its tapering of Bond purchases, which is expected to be complete by the end of the year. So in the end, it appears that traders can enjoy an early start to the weekend after getting up early for Friday?s ?yawn? of an employment report.? ?
Technical Notes? -? View Today’s Chart
Looking at the daily chart for the CBOE Volatility Index (VIX) and the June VX futures, we notice the index hovering at the low end of the recent trading range and approaching lows not seen since March 2013. The June futures have fallen sharply the past two trading sessions, as the front-month futures start to lose some of their premium to the cash index as we approach expiration. Support for the Jun VX is seen at 10.50, with resistance found at 13.10.?
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