Job growth in the United States exceeded expectations in May.
US employers added a net 175,000 names to payrolls, and the unemployment rate ticked up to 7.6%. The participation rate was unchanged at 63.4%.
Only transportation, non-durable manufacturing, and the public sector shed workers in May. Leisure, retail, and professional business services all added tens of thousands of workers.
One dark spot in the report was previous months' revisions. March's report was revised up by 4,000 and April's was revised down 16,000.
This report could get a mixed reaction from markets. Since it wasn't stellar, it doesn't add fuel to fears of the Fed slowing down quantitative easing, but it did beat expectations, so it might possibly spur gains in stocks.
Futures were lower leading up to the jobs report, reflecting bearish expectations stemming from the disappointing ADP private sector employment report and a ho-hum count of initial jobless claims. Before the opening bell, Dow
(INDEXDJX:.DJI) futures were down 0.07% at 15,026 this morning before the opening bell. S&P 500
(INDEXSP:.INX) futures also fell 0.02% to 1,622.40, suggesting a third straight week of declines on the index. Future contracts on the Nasdaq
(INDEXNASDAQ:.IXIC) index climbed 0.08% to 2,947.25.
Treasuries also advanced before the jobs report. The 10-year yield fell 3 basis points to 2.05%. Yields are down 7 basis points since April.
The yen to dollar ratio rose the fastest since 2010 today to 95.7 to the dollar. The Nikkei
(INDEXNIKKEI:.NI225) fell 0.21% overnight, even as a public pension fund confirmed that it will cut its allocation to Japanese government bonds in favor of stocks. Japanese equities are now down 20% from their 52-week high just weeks ago, officially in a bear market.
European stocks were also mixed overnight. Germany's import demand rose, in April, as did exports. Imports are up 5.2% year-over-year and exports are up 8.5%. Also in April, industrial production in the country rose 1.8% month-over month.
(NYSE:JPM) analysts cut their profit estimates for Samsung Electronics
(KRX:05930), sending shares down 6.2%, erasing $12 billion of market value. The analysts expressed concerns that its smartphone business, which accounts for 70% of profits, will not grow as fast as it has in the past. The new Galaxy S4 smartphone exhibited weak demand in key markets, and orders have been cut by as much as a third. The Korean gadget conglomerate was also shaken by reports that Apple, Inc.
(NASDAQ:AAPL) might allow iPhone users to trade in older models for a discount on new ones. Apple might confirm this, as well as updates to its product lines at Monday's developer conference.
Fresh after revelations that the National Security Administration collects phone call metadata on millions of Verizon
(NYSE:VZ) customers, the Guardian
newspaper also uncovered another undisclosed data mining program called PRISM, which allows the government to collect data on users of popular Internet services including Google
(NASDAQ:GOOG) and Facebook
(NASDAQ:FB). A Google spokesman denied the newspaper's claims.
(NYSE:WMT) is holding its annual shareholder meeting today, where it will take a drubbing from investors over the Mexican bribery scandal.
No positions in stocks mentioned.
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