U.S. Payrolls Surge 290K, Jobless Rate Advances to 9.9%
The report also showed an upward revision of 230,000 from 162,000, making April’s reading the fourth consecutive advancement in the past five months. In addition, the number of temporary workers jumped 26,200, while factory payrolls at builders increase 14,000, following a gain of 26,000 in March. The reading shows an improved outlook for the labor force as companies increased their staff as sales and profits improve. At the same time, the construction industry added jobs in April. This is noteworthy because the industry was the most impacted during the crisis. Looking ahead, the central bank is forecasting that the unemployment rate will fall to 9.60% this year and tumble to 8.35% in 2011. Nonetheless, investors are weighing in a zero percent chance that the Federal Reserve will raise rates twenty five basis points at its next rate decision meeting on April 28th as Americans who dropped out of the workforce continue their job hunt , while households face tightening lending standards.
Immediately following the jump in non-farm payrolls, the EUR/USD tumbled from a high of 1.2759 to 1.2667. Looking at the daily chart, the pair has made a fresh yearly low of 1.2520 yesterday and may decline further as Greek woes linger. It is noteworthy that we may see an upside bounce in this pair as the relative strength index signals that the pair is oversold.
Written by Michael Wright, Currency Analyst
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