The Dow Jones Industrial Average today (Friday, June 3) fell 31 points on the heels of a disappointing May jobs report. The numbers indicated the rose-colored glasses worn by Fed officials in recent weeks aren't reflecting the true state of the U.S. economy. After several rounds of speeches by Fed officials in which they touted economic growth, job market resiliency, and projected multiple rate hikes by December, the dismal employment report likely spoiled their summertime monetary plans.
Dow Jones: 17,807.06; -31.50; -0.18%
S&P 500: 2,099.13; -6.13; -0.29%
Nasdaq: 4,942.52; -28.85; -0.58%
First up, the good news was the official U.S. unemployment rate fell to 4.7% in May. The bad news: The U.S. economy created just 38,000 jobs, falling well short of economist expectations. Forecasts called for 158,000 new jobs.
Economists argued the numbers were likely going to be held down due to the massive strike by workers at Verizon Communications Inc. (NYSE: VZ)
The weak jobs report reduced the odds of an interest rate hike in June from 21% to just 4% after the announcement, according to CME FedWatch. The more important figure is the expectation of a rate hike in July. That figure fell to 34%, just days after it was becoming a foregone conclusion that the central bank would take action in the early summer.
Asian shares rose on Monday and the dollar wallowed close to its lowest in nearly a month after U.S. nonfarm payrolls showed the slowest job growth in more than five years, quashing expectations for a near-term U.S. interest rate hike.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS was up 0.4 percent in early trade. Wall Street ended down on Friday, though off session lows, with the S&P 500 .SPX finishing within just 1.5 percent of its record closing high.
Japan's Nikkei stock index .N225 slipped 1.6 percent, after the dollar skidded 2 percent against the yen on Friday.
Reference: Money Morning, Reuters
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