Although traders viewed the initial release of the drastic jump
) data with hefty optimism, do these numbers truly reflect what is
happening in the American economy?
earlier today has hinted that the payrolls data published this
afternoon was in fact a deceptive rise which did not mirror the
real story. The article discussed the optimism of the overall
figure, but weakness found among the internal data set.
Mainly, it noted that the labor participation rate remained
unchanged; the "real" unemployment rate, which factors in
underemployment and part-time workers desiring full-time work,
actually rose to 15.9% since last month; the percentage of
involuntary part-time workers remained unchanged; and, basically,
that the more accurate household survey revealed a decline of
191,000 jobs in April as opposed to the NFP report of 244,000 new
jobs being added.
The rise in the unemployment rate to 9.0% from last month's 8.8%
seems to support the assessment by CNBC.
Several other articles have suggested the same, citing strong
jobs data from the NFP, but weakness and high risk exposure which
will likely drag on the US economy in the months ahead, leaving the
Fed no choice but to hold rates at their current low.
This continued rate differential will hold the USD lower versus
its primary currency counterparts throughout most of 2011. But
today's sudden flight to safe havens brought on since yesterday's
announcement from the ECB that euro zone rates would be held steady
with no timeline for a second hike in 2011 has continued to boost
the dollar in trading. Whether this rise will continue in to next
week is yet to be seen.