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Non-Farm Payrolls (May) Actual -345k, Expected -520k, Previous -504k (Revised from 539K)

Unemployment Rate (May) Actual 9.4%, Expected 9.2%, Previous 8.9%

Release Explanation: A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number of paid U.S. workers of any business. The report excludes the following employees:
 
The NFP impacts the Market with huge volatility because of the constant revisions to the previous reporting periods. The accompanying Employment % number tends to be much more reliable in its monthly report. The Average Hourly Earnings will add to, or contain the impact of the number of jobs created. These 3 components go to make for explosive NFP Fridays.
 
“Outside of the Interest Rate Statement, this is the most important guide for US$ Traders planning for the weeks and months ahead as the Labor Market will indicate the potential strength of future economic growth. A strong economy usually equates to a strong currency,“ TheLFB-Forex.com Trade Team said.
 
TheLFB-Forex.com Trade Desk Thoughts: According to the Non-Farm Payroll report, the U.S. economy shed only 345K jobs in May, even though the market expected the report to show that the economy lost 520K. The April read was revised lower, from the -539K initially released to -504K. 

On the other hand, the unemployment rate surged 0.5%, to 9.4%, much more than expected. From the beginning the current downturn in the labor market, unemployment had risen by 7.0 million persons, which is equivalent to a 4.5% rise in the unemployment rate. The number of persons working part time remained at 9.1 million in May. The number of such workers’ has risen by 4.4 million during the recession. 

The economy lost approximately 225K jobs in the goods production, from which the staggering majority came from manufacturing, -156K, while the rest were recorded in the construction department. The service side of the economy lost 120K, while the only sectors that added new employees in May were education and health, up by 44K, together with leisure and hospitality, up by 3K. The death/birth model added 220K jobs, much more than in the previous few months.

“The U.S. economy lost only 345K jobs, the least in the last eight months. However, negative news came from the unemployment rate, which continued to surge to the highest level since 1983. Over the last thee months, evidence has mounted that the economic contraction is slowing and this release certainly strengthens that view,” TheLFB-Forex.com Trade Team said. 

Forex Technical Reaction: The currency market had a very strong reaction to the news release. The euro surged 80 pips, while the pound gained 50 pips, but these moves were completely retraced in the following few minutes. The S&P futures jumped 8 points as the report hit the wires, breaking above the 945.00 resistance area. 

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