Employment stinks ... dollar falls ... crude soars
For starters, the May employment report wasn't pretty. The U.S. economy lost 49,000 jobs in May, the fifth month in a row of declines and worse than April's downwardly revised drop of 28,000. Job cuts were widespread -- in construction (-34,000), manufacturing (-26,000), trade and transport (-41,000), and temporary help (-30,000). The only decent hiring was in education and health care (+54,000)
While average hourly earnings rose 0.3% on the month, better than the 0.1% increase that was expected, the unemployment rate was a gigantic shocker. It soared to 5.5% from 5% in April, the biggest month-over-month rise since February 1986 and much higher than the 5.1% reading that was expected.
But the REAL story isn't the economic data, it's the oil market. Crude oil futures ramped higher by about $5.50 yesterday. And this morning, they're surging even more -- $6.62 a barrel at last count. You can blame the falling dollar. Its drop against the euro yesterday was the trigger for the first leg of the oil rally, and its further decline this morning in the wake of the disappointing jobs data has helped turbocharge crude.