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Friday, June 4, 2010
Last Fall in this Blog I suggested that you need to be careful when looking at the jobs number. I warned that the hundreds of thousands of temporary people hired by the government to take the census would inflate the job creation numbers. That prediction came home to roost today. The market was looking for 525,000 new jobs the report came in at 431,000 with 411,000 temporary census takers. The non-farm payroll came in at plus 41,000 when the economists were looking for 200,000.
As you would expect the number were very disappointing and many of the stock markets around the world were selling off. Will this be the first time that the market closes down on the jobs data in 18 months?
Just yesterday 3 Fed officials were saying that the Fed might have to consider raising short-term interest rates. With the 41,000 new jobs and the announced layoffs and the weekly jobless claims data I just don’t see it happening.
I was not looking for the Wolf pack to come out again until July. If the 1044 level can hold then I would expect to see a bounce above 1100 before we go down to the 950 to 1000 level on the S&P 500.