At an event on Monday in Philadelphia, Yellen gets her last chance to offer insight into Fed thinking before a media blackout takes effect ahead of the June 14-15 monetary policy meeting.
"We will have to listen carefully for her analysis of what definitely is a deterioration of the labor market conditions," economists at BNP Paribas wrote in a note.
Investors will be looking to see whether Yellen, who had said last month she expected interest rates to rise "in the coming months", sticks to her tune after the data.
Rosengren flags jobs report, yet says Fed rate hikes coming
The U.S. economy's rebound from a weak winter has moved the Federal Reserve closer to raising rates, though last month's poor employment report might give it pause, a top Fed official said on Monday.
Boston Fed President Eric Rosengren, speaking in Finland, gave the latest hint that while the U.S. central bank remains on track to continue tightening policy it likely will not do so at a June 14-15 meeting.
"Lately the economic data have been choppy" with the May employment report "disappointing," Rosengren, a dovish voter on Fed policy this year, said at the Global Interdependence Center conference in Helsinki.
Rosengren said the jobs data contrasted with a strong pick-up in U.S. spending and growth in the second quarter, so "it will be important to see whether the weakness in this report is an anomaly or reflects a broader slowing in labor markets."
But he still expects "sufficient economic growth to justify a gradual removal of accommodation" and he noted that, at 4.7 percent, unemployment has dropped to his estimate of "full employment," a key goal since the financial crisis.
Jobs Disappoint: Signal Slower Growth, No Fed Move In June.
May’s job gains disappointed at 38,000. Even excluding strike effects, job gains have clearly slowed and signal weaker growth in 2016 compared to 2015. A Fed move for June is off the table.
Overall job growth in May was a disappointing 38,000. Growth was in part depressed by the Verizon strike, which kept about 35,000 workers off the payrolls in the telecommunications sector. However, weakness was widespread outside the information sector. Employment fell in all goods producing sectors, including construction (for second month in a row) and manufacturing, consistent with below break-even ISM manufacturing employment index. Private services grew by 61,000, the smallest gain in nearly four years. Temporary employment, traditionally seen as a leading indicator of total employment, fell by 21,000 in May. May’s decline follows a string of weaker readings in recent months. Over the past year, temporary jobs have increased an average of only 1,400 per month, the weakest print since payroll employment bottomed in February 2010. With the slowdown due to more than a clear one-off, today’s report lowers the odds of the FOMC raising rates in June.
The labor force participation rate fell back to 62.8 percent. The rebound in participation from September through March increasingly looks like a head fake and renews doubts about how many workers sidelined since the recession can be drawn back into the labor force. The unemployment rate fell to 4.7 percent, but misrepresents the situation given the sharp decline in the civilian labor force over the past two months. We suspect the FOMC may once again lower its estimates of what would be considered full employment with its updated economic projections later this month.
Stumbling dollar, Nigeria sabotage push up oil prices
Brent crude oil prices rose on Monday, lifted by a plunge in the dollar that could spur demand just as attacks on Nigerian oil infrastructure tighten supplies, but signs of recovering U.S. output capped gains.
Brent crude futures LCOc1 rose as high as $50.10 but retreated to be up 38 cents or 0.7 percent at $50.02 a barrel at0700 GMT. U.S. crude futures CLc1 were up 41 cents or 0.8 percent at $49.03 a barrel.
Traders said oil prices rose on a sharp fall in the dollar .DXY on Friday after weak U.S. jobs data sparked concerns over the state of the world's biggest economy, cutting expectations of a near-term cut in U.S. interest rates.
A weaker dollar supports fuel demand in the rest of the world as it makes dollar-traded oil imports cheaper.
"The weaker U.S.-dollar drove commodity prices higher," ANZ bank said on Monday.
raders said prices were also propped up by attacks on oil infrastructure in Nigeria, which has already pulled the country's output to over 20-year lows and which rebels said could fall to zero soon.
So far, supply cuts like those in Nigeria or Libya, have been met by rising output in the Middle East, especially Iran, which has been ramping up its output following the end of international sanctions against it in January.
The price rally, however, was capped on signs of increased output.
U.S. energy firms this week added rigs drilling for oil for the second time this year, energy services company Baker Hughes Inc (BHI.N) said on Friday, as producers cautiously upped activity following months of rising prices.
Drillers added nine oil rigs in the week to June 3, bringing the total rig count up to 325, compared with 642 a year ago, Baker Hughes said in its closely followed report.
Reference: Reuters, Wells Fargo
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