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Weak Jobs Data Points To Disappointing Nonfarm Payroll Number Tomorrow

July 1, 2010 12:36 PM EDT
Another concerning data point on the nation's job picture was released today, which has investors nervous going into tomorrow's important June Non-Farm Payrolls (NFP) report.

Today, initial jobless claims for the week of June 26 were reported at 472,000, below the consensus of 455,000 and an increase of 13,000 from the previous week's revised figure of 459,000. The 4-week moving average was 466,500, an increase of 3,250 from the previous week's revised average of 463,250.

This data also follows the weak ADP Employment Report earlier in the week. The ADP report showed private employment increased 13,000 in June, after a revised increase of 57,000 in May, which was previously reported up 55,000. Economists were looking for a much brighter increase of 60,000 this month.

For tomorrow's report, economists on average are looking for a loss of 125,000 jobs on the month and an unemployment rate of 9.8%. The high estimate is a gain of 50,000 jobs, while the low estimate is a loss of 200,000 jobs. In May the U.S. economy added 431,000 jobs, but 411,000 of those jobs came from hiring for the U.S. census.

Traders will look for immediate moves in stocks, bonds, the dollar, and oil based on this important number. Some ETFs to watch for quick action will include: SPDRs (NYSE: SPY), UltraShort 20+ Year Treasury ProShares (NYSE: TBT), PowerShares DB US Dollar Index Bullish (NYSE: UUP), and United States Oil (NYSE: USO), among others.

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ADP Employment Report, Initial Jobless Claims, Layoffs