Finance

Morning Market Roundup: Real Story Behind the Jobs Numbers, Markets Scared, Et Tu Romania?

Here’s what’s important in the business world this morning:

Unemployment: The U.S. unemployment rate has fallen to 8.1 percent, down from 8.3 percent, according to official figures from the U.S. Labor Department. However, even if these figures are accurate, the U.S. economy is hardly out of the woods.

“Employers in the U.S. added fewer workers than forecast in April and the jobless rate unexpectedly declined as people left the labor force, underscoring concern the world’s largest economy may be losing speed [emphasis added],” Bloomberg reports.

In other words, the decrease in unemployment can be attributed to the fact that people have left the labor force — a lot of people.

“In April the number of people not in the labor force rose by a whopping 522,000 from 87,897,000 to 88,419,000 [emphasis added],” Zero Hedge reports.

“Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 rise in March that was more than initially estimated…The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance,” Bloomberg reports, adding that earnings stagnated.

Bottom line: the economy created only 115,000 jobs in April, 522,000 people left the labor force, the “official” unemployment rate is 8.1 percent, and total employment for the month actually fell 169,000, according to CNBC.

Oil: Oil prices fell below $102 a barrel Friday in Asia amid investor concern U.S. jobs growth last month may disappoint and suggest demand is weakening.

Benchmark oil for June delivery was down 98 cents to $101.56 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $2.68 to settle at $102.54 in New York on Thursday.

Brent crude for June delivery was down 67 cents at $115.41 per barrel in London.

Romania: Romania’s new left-leaning government has pledged a moratorium on shale gas exploration and will review a controversial Canadian plan to build Europe’s largest open-cast gold mine.

Prime Minister-designate Victor Ponta also said he will respect commitments to the International Monetary Fund, and increase public sector wages that were slashed by 25 percent in 2010 to meet the terms of a (EURO)20 billion($26 billion) IMF-led loan.

The measures are part of Ponta’s governing program, which was published Friday. Parliament is expected to approve Ponta’s Cabinet in a Monday vote.

The previous government which fell in a confidence vote last week, awarded U.S. petroleum company Chevron Corp. exploration rights of shale gas for large areas near the Black Sea in March, which drew criticism from environmentalists

Canada’s Rosia Montana Gold Corp. which has been waiting for permits to go ahead for 14 years for the gold mine in Transylvania, says it is believed to contain 300 tons of gold and 1,600 tons of silver.

The project, has been strongly criticized by environmentalists and historians because it uses cyanide in the extraction process and the mine is located in an area where there are Roman remains.

On Edge: Markets are on edge Friday because of crucial U.S. jobs figures and the weekend elections in France and Greece that could have a big bearing on how Europe’s debt crisis plays out over the coming months.

Before the elections, investors have the monthly U.S. government jobs report to digest. It often sets the market tone for a week or two after its release as it‘s considered the key barometer of the health of the world’s largest economy.

Following a week of mixed U.S. economic releases, there’s a high degree of uncertainty going into the figures, which will be released an hour before Wall Street opens. At the moment, the consensus in the markets is that the U.S. generated around 160,000 jobs during April – a steady if unspectacular result. The range is between 90,000 and a little over 200,000.

UPDATE: U.S. stocks are falling sharply after the government reported that hiring slowed in April, confirming a slew of data during the month that showed the economy was weakening.

The Dow Jones industrial average was down 160 points at 13,046 shortly before noon Friday.

The Standard & Poor’s 500 index slipped 20 points to 1,371, while the Nasdaq composite index gave up 60 points to 2,963.

The Associated Press contributed to this report.

Comments (30)

  • cessna152
    Posted on May 4, 2012 at 1:04pm

    Wow! This is great news… Unemployment is down. I will go and spend lots of money because my job is secure and so is everyone else. We‘re on the road to recovery and our government is so trustworthy that I’m gonna’ buy bonds as well!

    Report Post » cessna152  
    • physicsnut
      Posted on May 4, 2012 at 1:19pm

      Just read more nonsense about immigration over at tnr. Mr noah says that it looks like the liberals were right – that the best way to reduce illegal immigration was to help those countries to flourish economically. Really ? In a previous sentence he mentions that it cost Americans 700,000 jobs. This is a new concept of “help” that I was not previously aware of.

      Report Post »  
    • JRook
      Posted on May 4, 2012 at 1:20pm

      As they say statistics don’t lie, liars use statistics. And the corollary, statements don’t lie, liars take them out of context and don’t research them if they serve their purpose. How about the blaze expend some energy looking at how many baby boomers will be retiring annually or monthly over the next 10-20 years and perhaps they can provide some real insight into the leaving the workforce figure. Also, perhaps some research into how many who start their own business are initially regarded as leaving the workforce.

      Report Post »  
    • Walkabout
      Posted on May 4, 2012 at 5:31pm

      JRook
      . Also, perhaps some research into how many who start their own business are initially regarded as leaving the workforce.

      ***

      Rush reported that new business start ups are a their lowest in 3 decades.

      Also startup.com went bankrupt. That is an anecdotal but so apropo.

      Report Post »  
    • Walkabout
      Posted on May 4, 2012 at 5:32pm

      JRook

      How about some of the baby boomers who have taken a hit in their 401 Ks are putting off retirement.

      Report Post »  
  • Unix
    Posted on May 4, 2012 at 12:59pm

    This is the fact that is of utmost importance:

    “In April the number of people not in the labor force rose by a whopping 522,000 from 87,897,000 to 88,419,000 [emphasis added],” Zero Hedge reports.

    These 88 million are off the dole and no longer counted, thus the wonderful 8.1% will be touted by this administration as a positive. Now that is a LAUGH, but it is no laughing matter!

    It’s a depression for me, because I’m out of work for 3 months now, with nothing on the horizon and going thru my stash quickly. I will be on the street fairly soon if things don’t change for me. This person in the WH has no idea what he is doing, and is wrecking the economy every day he is there occupying it. VOTE the Progressive Communist maniacs out of power, so we can get back to the business of free markets and get the GOVT out of our lives and business’…this is an imperative!

    For all the Paul supporters thinking of writing in his name this fall, don’t do it, because that will give Obama the election and 4 more years to FINISH us off…think about it, I BEG YOU!!!

    Report Post » Unix  
    • MCDAVE
      Posted on May 4, 2012 at 10:05pm

      For the homebuilders ..we have been living in this disaster for 4 yrs now..we survive on what little work we can find…2012 is the worst year yet…not had a house to build in three yrs…used to build them 6 at a time…50-60 jobs lost just because of my small company alone …good luck with your job search

      Report Post »  
  • Delores at CH WV
    Posted on May 4, 2012 at 12:57pm

    I don’t think that anyone believes the Stats that the government provides. I laugh at the Stats and these false polls we see everyday.

    Report Post »  
  • Delores at CH WV
    Posted on May 4, 2012 at 12:56pm

    Who is writing and printing all of these books? Surely, no one would buy a copy of this nonsense.

    Report Post »  
  • nueces
    Posted on May 4, 2012 at 11:00am

    Welcome to Third World status. Where the rich are stupid and lazy rent collectors and the working class is oppressed by a police state. While the poor starve and live in slums. I used to poo poo folks who claimed we were becoming a Third World nation. Not any more.

    Think about it. It is the natural state of humanity. Serfs and princes. We need a civil war asap.

    Report Post »  
  • Outlaw_Josey_Wales
    Posted on May 4, 2012 at 10:48am

    The Great “Barack Houdini Obama” will make the unemployment rate drop below 7% by election day.

    Report Post » Outlaw_Josey_Wales  
    • lukerw
      Posted on May 4, 2012 at 2:50pm

      The Question is in the Sealed Envelope… and The Answer is: 7%!

      Report Post » lukerw  
  • flsnipe
    Posted on May 4, 2012 at 10:07am

    Like every thing else its a lie our country is falling apart so fast I don’t know it can be saved. We are headed for some dark times.

    Report Post » flsnipe  
  • mr166
    Posted on May 4, 2012 at 10:07am

    With one simple change Obama could reduce the unemployment rate to 3% or less. All he has to do is change the unemployment eligibility requirements. Right now you cannot get benefits unless you are actively looking for a job. He should change that and make the benefits contingent on NOT actively looking for a job. Bingo, unemployment falls dramatically.

    This plan makes about as much sense as any of his other plans.

    Report Post »  
  • Beckofile
    Posted on May 4, 2012 at 9:56am

    Unemployment is down because because the folks never had jobs in the first place. Go to http://www.shadowstats.com for the real numbers on inflation and neveremployment.

    Report Post » Beckofile  
    • pscully17
      Posted on May 4, 2012 at 10:13am

      So, in real world estimates, the WEEKLY average of jobs lost and first time unemployment claims is 350; PER WEEK the jobs created last MONTH was 115k AGAIN last MONTH..hmmm : 350 x 4 equals 1.4 MILLION new JOBLESS claims last month, which unbelievably is offset by 115k jobs added, and the unemployment rate went down 2 notches, 2 tenths of a percent? Thanks some magical math spin we have going here. Everybody, please youtube: Alan Grayson grilling Elizabeth.Coleman the inspector general, tasked with investigating where the federal reserve sent upwards of 9 TRILLION.DOLLARS! you will scream obscenities starting about the 39 second mark.

      Report Post »  
  • MONICNE
    Posted on May 4, 2012 at 9:52am

    Thank God that American manufacturing is best in a decade and that our Dow is 54% higher than it was when the Administration took office, and holding at 13,300 for the week; the best average like, ever.

    Hopefully this will compensate for the horrible employment news, which is barely keeping pace with the number of illegal Australians who sneak into our workforce every month.

    TEA

    Report Post » MONICNE  
    • Inlightofthings
      Posted on May 4, 2012 at 10:28am

      ENCINOMICNE:
      Isn’t that indicative of the 1% you demonize. Quite hypocritical don’t you think?

      Report Post »  
    • MONICNE
      Posted on May 4, 2012 at 10:45am

      You apparently do not understand what it is like to be a part of the American One Percent. We are very proud to be leading the way, while remaining humble and grateful for the benefits of residing in our wonderful country; and while we fully support the country, we are Taxed Enough Already.

      But I would rather pay taxes in the USA than

      Report Post » MONICNE  
    • MONICNE
      Posted on May 4, 2012 at 11:22am

      …in Australia, LOL!

      TEA

      Report Post » MONICNE  
  • Inlightofthings
    Posted on May 4, 2012 at 9:52am

    I’m off to watch NBC to confirm the numbers…

    Report Post »  
  • Blackhawk1
    Posted on May 4, 2012 at 9:46am

    Any bets that Obama comes out today to praise the fall in the unemployment rate? Of course he won’t tell the truth of why the rate fell to 8.1%. Liberals wouldn’t know the truth if it smacked them in the face!

    Report Post » Blackhawk1  
    • Hugh Williams
      Posted on May 4, 2012 at 9:58am

      You are correct but the sad thing is the young liberals have been taught nothing by lies their whole life. It is really not their fault they are ignorant since they have never been taught the truth about Capitalism and the free market by the government schools.

      Report Post » Hugh Williams  
  • Hugh Williams
    Posted on May 4, 2012 at 9:46am

    So many Americans are so poorly educated in economics they will not understand what a giant lie this report is. And of course the government controlled media will never try to explain the truth. By October the jobs report will show a 3% or 4% unemployment rate. Of course it will be a lie but it will praised by the media as the truth. This is an example of why the leftist have been dummying down the government schools for years. An ignorant and uneducated population is easy to lie to, manipulate and control.

    Report Post » Hugh Williams  
  • Snaker
    Posted on May 4, 2012 at 9:33am

    Fewer people working, “cooked” books, numbers will be revised in two weeks.
    And things are getting better?
    Gee, Wally, I’ve got some ocean-front property you’ll be interest in…..

    Report Post »  
  • Economist
    Posted on May 4, 2012 at 9:33am

    Did anybody not expect disapointing numbers? This ship is going down fast. Stimulas just does not work when you are debt saturated. The government is still playing the last game not understanding that the rules have changed. Debt got us into this mess, and more debt is not the solution no matter how many nobel prizes Krugman has.

    Report Post » Economist  
  • MrButcher
    Posted on May 4, 2012 at 9:29am

    These unemployment numbers are a lie.

    Report Post » MrButcher  

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