Wall Street Rocked by Disappointing May Jobs Report
Analysts are anticipating volatility on Wall Street in the upcoming week, as investors come to grips with Friday’s dismal jobs report which noted that only 54,000 jobs were created in the month of May as compared to April’s figure of 232,000. This came as a huge disappointment to economists who have estimated that the economy needs to add around 150,000 jobs each month purely to keep up with population growth. Jobs over and above that figure would be addressing the problem of job losses. While economists were not expecting to repeat April’s figure and were aiming for 170,000 jobs in May, the figure of 54,000 came as a shock to all, sending stocks plunging, and causing economists to make major adjustments in their growth projections.
Statistics also revealed that the number of Americans who have been unemployed for more than six months climbed by 361,000, with the average number of weeks of unemployment reaching just under 40 weeks and the number of unemployed hitting 13.9 million, the highest it’s been this year. It’s become clear that many employers have put the brakes on hiring, as consumer dollars are being committed to increased prices of food, gas and other essential commodities, leaving little disposable income for non-essential goods. The earthquake in Japan and its impact on the motor industry also added to unemployment woes, as did government budget cutbacks which saw teachers, fire fighters, police and other municipal workers lose their jobs.
In the week ahead on Wall Street, Monday sees Apple CEO Steve Jobs deliver a speech at the Worldwide Developers Conference being held in California. It is widely anticipated that Jobs will be unveiling a new cloud computing music service for Apple (NASDAQ: AAPL). Tuesday’s highlight is the Federal Reserve’s consumer credit report for April, and on Wednesday afternoon, the Federal Reserve will make its Beige Book available, giving an overview of the economy in the jurisdiction of the Federal Reserve’s twelve regional banks. The Labor Department is set to release its weekly initial jobless claim report on Thursday morning. Given last week’s bad news, this is likely to be the most analyzed report this week. On Friday, investors can expect May’s import/export prices from the Commerce Department.