The US released its Jobs report showing that the Non Farm Payrolls fell 49,000 in May for the fifth straight month, better than the expected 60K drop yet worse than the previous revised reading to the downside to -28K from -20K. The Unemployment Rate inched higher in May to 5.5 percent opposing expectations of 5.1% and the previous reading of 5.0%.

The increase in the unemployment rate was definitely unexpected as market expectations were just a slight increase. This was the biggest unemployment gain since 1986 and the jobless rate was the highest since October 2004. Unemployment rate for teenagers jumped to 18.7% from 15.4%. Those seeking summer jobs were worried not to find any this summer as the US was heading into a recession and unfortunately this is what has actually happened.

Also released was the change in manufacturing payrolls for the month of May coming in at -26K higher than both the forecasted reading of -40 thousand and the prior reading of -46 thousand.

Job losses this month were witnessed mostly in construction, manufacturing, retail and temporary help jobs where health-care and government were the ones still on the rise and hiring. 45.4 percent of 274 industries were hiring in May while 33.3 percent of 84 manufacturing industries hired.

We've seen this week ADP saying it has added 40K jobs in the labor market with the biggest contributor being the services sector. The liability of the ADP data has been criticized lately since it was contradicting that of the non-farm similar to today. Yet we don't see the non-farm complaining about the services sector shedding jobs.

On the other hand, the employment sub index in the ISM services reading showed employment actually falling which again contradicted the data released by the ADP. However, please note dear reader that the ADP only takes private sector jobs into consideration and not public sector.

As for average Hourly earnings for May inclined to 0.3 percent from 0.1 percent in April and predictions of 0.2 percent. While the average hourly earnings annual reading came in at 3.5% higher that the forecasted and previous reading of 3.4% respectively. As for the average weekly hours for the month of May it came inline with both the expectations and prior reading of 33.7 respectively.

If we go back to liability, Fed Chairman Mr. Ben Bernanke's statements earlier this week about the labor market could be credible as he stressed on the fact that the labor market remains soft. But again, the readings from the labor department concerning unemployment and jobs this time of year is subject to large statistical distortions as a large flow of workers enter the labor market from young part-timers to full-time employees searching for summer jobs.

The labor market was the one holding the economy together since at times it seemed to be the only strong thing with the ongoing slump in growth levels. Growth in the economy is still facing downside risks but according to the Fed's it is expected to pick up pace once again in the second half of the year even as they go for the strong dollar policy and perhaps even hike rates to battle inflation eliminating any possibility for more easing of their monetary policy.

We have seen these statements affect the markets as the dollar was able to gain grounds heavily against all major currencies but failed to maintain this momentum. The federal currency sunk even further at the release of the job's report but is now slightly attempting to recover these losses against all BUT the mighty EURO! The Euro still holds strong as it was fueled by statements from ECB President Mr. Jean Claude Trichet yesterday hinting for a possible rate hike next month!

But it's safe to say that the labor data, despite the non-farm payrolls coming in better than expected, eroded optimism in the markets as the unemployment rate flew up to the sky. Surprisingly, many believe that this will have little impact on the decision of the Feds in three weeks time as they already see the economy and labor marketing further slowing in the upcoming period before showing any signs of reversal.

In a different report, the US released its wholesale inventories for the month of April showing that they have climbed to 1.3 percent from a previous 0.1 percent drop at a time where median expectations were for a 0.5 percent gain. With inventories inclining this is just adding more to woes that growth will slow down as the Feds forecast because it is obvious that consumers are not spending and the stockpiles just keep piling up.

Well that's all folks for this week as it has finally come to an end and you can now grab your breath dear reader and enjoy the weekend before another business week starts...