May Jobs Surprise!

A much better-than-expected Jobs report greeted investors this morning as the anticipated loss of around 8M in Non-Farm Payrolls failed to come to fruition. Instead, 2.5M new jobs were added and the expected surge in the Unemployment Rate to 19% from 14.7% actually became a decline to 13.3%. Average Weekly Hours grew significantly to 34.7 from 34.2 while Average Hourly Earnings, again skewed by who’s working and who isn’t, fell 1% after April’s skewed rise of 4.7%. The Labor Force Participation Rate also experienced an unexpected rise to 60.8% from 60.2%. The U-6 “Underemployment Rate” also improved to 21.2% from 22.8%. Also, surprisingly, the Manufacturing Sector enjoyed a jobs pick-up of 225k against an expected drop of 400k.

Undoubtedly, this encouraging news will support the expectation of a sharp rebound and that is already being manifested in early morning trading activity. Equity markets are poised to open the day significantly higher while Treasury prices are falling. The Ten-Year Treasury’s yield has surged to over 90 basis points as gold has fallen sharply to below $1,700.