Major averages once again turned losses into gains though on mixed volume as they rallied throughout most of the day after their drop shortly after the open.
As discussed in a prior report, investors seem to be viewing the markets as the glass is half full, instead of half empty, thus today's jobs report could send markets higher by the end of the day regardless of the numbers. That said, premarket reaction to the unemployment report has pushed futures lower.
Markets expected a 155,000 gain in nonfarm jobs and an unemployment rate of 4.9% in May. Instead, only 38,000 new jobs were created and hiring in the prior two months was weaker than originally reported, casting doubt on whether the Federal Reserve will raise interest rates later in June. The number of new jobs was the smallest the economy has created since the fall of 2010.
Interestingly, unemployment fell to 4.7% from 5% to mark the lowest level since the month before the Great Recession began in December 2007. Manipulation anyone? Before we know it, perhaps the unemployment rate will be going negative too ;oP.
Indeed, the drop in unemployment was almost entirely due to 664,000 people leaving the labor force. And new jobs creation for April and March were reduced by a combined 59,000.
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