The important Non Farm Payroll will be released at 8:30. The expectation is for a decline of -365K. The unemployment rate is expected to rise to 9.6%. The Manufacturing sector is expected to show a decline of 150K. The Average weekly hours is expected to remain at 33.1, a record low level.
Last month the tide turned with the NFP rising to -345 from -504 the month before and prior to that a string of numbers above -600K. The trough was -741K job losses in January. Since January 2008 when the current job recesssion started, 6 million people have lost their jobs. The unemployment rate has increased from 4.9% to the current 9.4%.
The Unemployment rate is expected to continue to move higher to 9.6% from 9.4%. In prior recessions, the Unemployment rate did not level off until 5 to 6 months from the peak of the NFP. This is due to a number of things but one explanation is people re-enter the labor force and this has the effect of bloating the employable people.
A number in the -300s or better will likely be viewed positively by the stock market/commodity market. This should benefit the commodity currencies and perhaps the USDJPY and Yen crosses. The EURUSD and GBPUSD can be pulled and tugged at depending on the market demand and supply. Overall, market risk increases during this release and with the number coming out when the ECB has their press conference, after a country debt downgrade, at the same time the weekly Initial Claims is released (exp 615K) and the July 4th holiday around the corner, does not make the risks any less.
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