Tuesday, July 07, 2009

NFP result means what?

Many of us experienced another week of high volatility as the intraday sessions were affected tremendously by the NFP result. Although last month’s impressive NFP result, showing a slowdown in job losses, Thursday’s figures showed investors a completely different story: unemployment rate climbed by 0.1% to 9.5%, thus the NFP figure dropped by a whopping 467k in June, much higher than the 325,000 decline expected by analysts.

So is there hiring that is going on? Are we on the path to recovery? You bet! Although the NFP result is still showing a gloomy picture it has managed to distance itself dramatically from January’s lows, as certain sectors have shown mild improvement during the second quarter.

General Motor’s contributed hugely to last months layoffs. Many U.S companies found it hard to keep employees, forcing them to cut their work force. Although many more are hiring, otherwise the unemployment rate would climbed more than 0.1%

Clearly the current recession is far from over but it is good to know that the situation is not getting worse – which means, it can go no where but up.

Still confident?