UK unemployment on the rise

Headlines, reading that 4,000 UK jobs were lost yesterday, have produced a raft of new estimates as to where the total number of unemployed will get to before this recession ends.

The consensus is that we will see a total in excess of 2 million imminently but from there it is anyone's guess. If anything, it makes the employment and earnings data, scheduled to be released at 9.30am today, even more relevant than the release of the BoE Quarterly Inflation Report at 10.30am.

That's not to say that the latter won't be watched with great interest but you have to feel that the content will have been anticipated and flogged to death in the press already. Unless there is something within the report that is totally out of synch with previous comment, one must assume the composition will be of concern on growth, rapidly falling inflationary pressures and worries of an undershooting of the inflation target in 12-18 months.

The unemployment numbers are expected to show an increase in people out of work of 35,000 giving a rate of 2.9% but I would not be surprised to see a higher figure of 40,000+ and 3%.

Really, it is difficult to see what sort of figures/statement can help Sterling in the immediate term with markets likely to view anything positive as a blip in the continued descent into the mire.

There are of course other things afoot around the globe following the near Global-wide Bank holiday for Armistice / Veteran's day yesterday.

Oil remains in the headlines with the recession led lack of demand keeping downward pressure on crude prices (WTI below $60 pb again to a 21-month low)) and talk of an additional emergency OPEC meeting, to try and cut production again, ahead of the scheduled mid-December get together in Algeria.

With the continued fall in demand it is difficult to see what OPEC can do. Keep their collective fingers crossed that there is a hard Winter, weather-wise, in the West and especially the US?

Following today's UK data, attention will shift to a raft of statistics coming from the Eurozone and its participant nations. Yesterday's German ZEW data gave a mixed message but by and large the current assessment still stinks.

Today we see Industrial Production estimates for September which are expected flat on the month with the danger on the downside.

Tomorrow the ECB will publish its monthly report for November which is likely to just put in print Trichet's prepared remarks at last week's post-Council press conference but on Friday we will see the preliminary estimates for 3rd Qtr GDP. This data is critical for the Eurozone. If, as seems almost certain, GDP turns out to have contracted again, then neither the ECB or anyone else will be able to argue against the fact that Eurozone is in recession.

This in turn will increase the likelihood that the ECB will cut rates regularly for the next 6-months until market rates reach the level with core inflation of about 1.75%.

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Weak US data worries wise money

Stocks suffer as a combination of weak economic and corporate news reinforced fears of a prolonged global recession.

Where to start; news from China showed that the economy there is in sharp decline removing any hope that China's growth will cushion the impact of the global downturn and reversed optimism sparked by China's announcement over the weekend of a huge US$600bn stimulus package.

Earlier corporate news from the US added to the gloom with Circuit City, the second largest electrical retailer in America, filing for bankruptcy protection, DHL announcing 10,000 job cuts and shares in the troubled car maker General Motors tanking to their lowest level since 1946 on fears that a bailout by the government will wipe out any remaining shareholder value.

Also weighing on sentiment was the announcement of a further cash injection by the US government in AIG to the tune of US$150bn after the ailing insurance company recorded a third quarter loss of US$24bn.

Fannie Mae, the nationalised, US mortgage finance company also reported a massive loss in the third quarter amounting to US$29bn, with repossessions running at a total of 67,519 homes, equivalent according to the Times to a town the size of Dayton, Ohio!

More disappointing news on the UK housing market came from the Nationwide Building Society when it announced that its net mortgage lending plummeted 70% over the last six months and warned that the whole UK mortgage market would fall by 80% this year.

Home sales continue to fall according to the latest survey from the Royal Institute of Chartered Surveyors (RICS). If this was not bad enough the British Retail Consortium said that retails sales fell for a fifth straight month in October down 2.2% the biggest decline since May 2005.

It would appear that more time is needed before the effects of last week's 1.5% cut in interest rates by the Bank of England kicks in but no doubt this data will increase the pressure on Gordon Brown and to deliver meaningful fiscal measures to reinforce the monetary stimulus provided by the central bank.

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Figures confirm US heading towards recession

Preliminary GDP data released yesterday showed that the US economy contracted 0.3% in the third quarter, its sharpest decline in seven years, as businesses and consumers reigned in spending as fears of a recession took hold.

The market consensus was for a decline of 0.5% so although the 0.3% contraction was the steepest decline since Q3 2001 it was not as bad as expected.

Continuing job losses coupled with declining gains from stocks and other investments have put consumers under severe stress. The GDP report showed that disposable personal income dropped 8.7% in the third quarter after rising 11.9% in the second quarter boosted by the US government's economic stimulus payments.

US Initial jobless claims for the week ending 25 October was left unchanged at 479k, above market expectations for a decrease to 475k. This compares to the revised 479k reading seen in the prior week (prev. 478k)

The Bank of Japan cut its interest rate by 20 basis points to 0.30%, less than the 25 basis point cut widely expected. The yen strengthened however on renewed investor concerns over riskier assets.

Asian equity markets returned to negative territory after a week of gains reflecting the gloomy outlook that persists despite interest cuts.

This morning a report showed that German retail sales fell 3.1% in September after a rise of 3.3% in August, some turn around and underpins expectations that the ECB will cut interest rates next week.

Gold slipped $3.75 per ounce to $731.75 and is on course for its biggest monthly decline since 1983, as oil also fell on recession fears forcing investors to cash in to stem losses.

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Stock markets remain main point of focus

Following the minor euphoria from the Joint activities last week, Stock markets again seem to be the main point of focus on the downside.

With further fears of recession, following poor British unemployment data (5.7%, its highest level in eight years), the Fed's beige book reporting weakened economic activity across all states and the U.S. government reporting retail sales falling 1.2% in September (biggest monthly decline in 3 years) this may have been enough to turn the markets negative.

But to ensure the markets did not stay positive/confident for too long Mr Bernanke stated that a marked slowdown will be seen in spending, investment and jobs. Also that market turmoil is a significant threat to growth.

These recession fears led to risk -averse selling with the US dollar benefiting from the purchase of U.S. assets, with the Dollar heading back down.

Also during New York trading we saw the Skandi currencies hit 2 yearly highs against the dollar overnight and this morning EUR/SEK hitting its highest ever official level over 10.000 to 10.1440 due to the lower risk appetite and low liquidity in periphery currencies

This morning we have seen an announcement that Switzerland's two largest banks (Credit Suisse and UBS) will receive billions of francs of emergency funding from the country's government and other investors to shore them up against the financial crisis.

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The road to recovery

The US Treasury announced yesterday that it will spend at least $250 bn on preferred equity from major financial institutions.

The plan is in some ways a turnaround for the government which initially seemed to be focusing on the $700 bn programme authorized by Congress on buying up illiquid assets that were clogging the banking system.

German's ZEW sentiment survey released yesterday reflected a deterioration in confidence in September, the height of the financial crisis.

The ZEW said that perspectives for economic development have significantly deteriorated due to the financial crisis but a separate analysis following the bank rescue package reveals a less pronounced decline in expectations.

In the UK CPI released yesterday posted a higher than expected 5.2% - the highest since 1997. Whist on the surface a high reading may be deemed to be problematic for the Bank of England the MPC's focus seems to be shifting to that of growth concerns as inflation is forecast to cool by mid-2009.

In the same breath, UK unemployment rose to the highest level in almost two years, slightly ahead of expectations as market participants forecast a significant deterioration in the labour market.

Risk appetite continues to play a significant role in the market, whether it be equities, cash, commodities or currency. Sentiment for sterling remains positive as the UK government continues to lead the way in dealing with the current challenges in the market.

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Sentiment is mixed as volatility continues

There was mixed sentiment in the markets on Friday as the House of Representatives voted 263-171 in favour of the $700 billion financial rescue package.

The bill, which had been rejected on Monday, was formally approved after $149 billion in tax breaks were added to the proposal. It means that the US Treasury now has the power to purchase toxic assets from banks, in an attempt to stabilise financial markets. Stock markets had rebounded early on Friday but then started to turn negative as the economy took centre stage.

US payrolls plunged in September, recording the biggest monthly decline in five years. Although the unemployment rate remained at 6.1%, the 159,000 job cuts added to the growing fears of weakening global activity. The Dow and S&P500 closed 157 and 15 points lower at 10,325 and 1,099 respectively. While the FTSE managed to hold on to some of its gains, posting a 110 point increase to finish at 4,980.

Weaker than expected data on the UK service sector has led to an increased number of economists predicting that the BoE's monetary policy committee will cut rates this week.

The PMI services headline index, which was released on Friday morning, dropped to 46 in September against an expected reading of 48 and lower than August's 49.2. It led to the number of economists expecting at least a 25 basis point cut increasing to 47 out of 61 compared to just 21 earlier in the week.

The rapid deterioration in data over recent weeks has provided further evidence of the gloomy outlook facing the world's major economies, causing some to call for the central banks to deliver coordinated rate cuts. Although this seems unlikely, there is an increased possibility that the MPC, FOMC and ECB will all reduce their respective target rates in quick succession.

Particularly after Trichet informed the markets, in his post announcement conference, last Thursday that the ECB's council members had considered cutting rates at its meeting.

Away from monetary policy, Europe's central banks have committed to further liquidity operations as they endeavour to kick start money markets. Overnight rates tumbled in the days that followed the third quarter end, while term rates remained elevated in a sign that stresses beyond the one day period now exist more than ever.

The Bank of England announced that it will offer £40 billion of three month funds to banks and except a wider range of collateral, staring today. At the same time the European Central Bank will increase the number of banks that have access to its fine-tuning overnight auction to 1,700, from the existing 130.

The euro slumped to its lowest level in over a year against the US dollar and sterling recorded its biggest decline since October 1992, after dropping 4 percent last week.

It would appear that markets now feel there is more bad news to price in for the UK and euro zone, which is likely to weigh on the respective currencies. However the Pound did manage to move to the highest level in seven months against the euro.

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Uncertainty and weak data weigh on markets

Another day of uncertainty surrounding the US government's $700 billion financial rescue plan coupled with the worsening global economy weighed on markets yesterday.

European stocks which had been in positive territory were dragged down by Wall Street stocks as investors fell prey to the concerns enveloping US markets. The FTSE100 lost ground in afternoon trading to post a 1.8% decline, the Dow and S&P500 finished 3.2% and 4% lower respectively.

It would appear that market participants are becoming cautious that even if the bailout bill is passed, it may do little to affect the rapidly weakening global outlook.

Republican leaders are currently attempting to persuade their party members to back the rescue package before it is put to vote in the House again this Friday. While the democrat party may be reluctant to take the bill before lawmakers unless they are sure of success. However, recent comments would suggest that there is more chance of the bill being passed than not.

The first data release from the US showed there was no change in the direction of US jobless claims, which increased to 497k from the previous weeks 496k. This is the highest level in seven years and offers an indication of how the financial turmoil is hitting the real economy.

Lower than expected factory orders also signalled that the US economy is grinding to a halt as businesses pullback spending. The 4% drop for August was the most in almost two years.

The European producer price index provided more evidence that inflationary pressures are easing in the euro zone. Prices rose 8.5% in August from a year earlier, compared to last months 9% increase and the monthly figure dropped 0.5%.

Data from Nationwide illustrated the largest decline in UK house prices since the survey began in 1991. The year on year number came in at -12.4% and the monthly number at -1.7%.

After the European Central Bank announced their decision yesterday to keep the benchmark rate at 4.25%, Trichet said that the financial market turmoil is dampening economic growth and inflation risks have diminished. Having taken a while, it appears that the governing council has finally changed sentiment and it could be suggested that this is a clear sign that a rate cut is in the pipeline. Possibly before year end.

Trichet's comments helped the euro to a 13 month low against the dollar, declining for a fourth consecutive day against the greenback. The pound looks to be heading for a 4 percent drop against the dollar this week. Sterling is little changed against the euro.

Crude oil continued its fall yesterday. The November Nymex futures contract has declined 13 percent so far this week and it is difficult to see any upside given the likely slowing in demand as the US flirts with recession.

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Jitters continue as House vote looms

As expected, approval was obtained from the US Senate last night for Treasury Secretary Henry Paulson to push ahead with his Troubled Asset Relief Program (TARP) .

The bill received a 74-25 vote with 40 Democrats, 33 Republicans and independent Joe Lieberman voting in favour of the plan. Backed by the Bush administration, the package now goes to the House of Representatives, which rejected Paulson's initial version of the proposal.

Once the bill had been passed, Senate Banking Committee Chairman Christopher Dodd joined the Treasury Secretary in commenting on his hopes that the vote would send a strong signal to global markets.

While the US equity indices were unable to finish in positive territory they did rebound off the lows of the sessions. The Dow ended just 20 points lower and the S&P500 posted a marginal decline of 5 points. It seems that markets are likely to remains nervous until the new House vote which is expected on Friday.

At 12:45 today we have the ECB rate announcement. As the euro-region slides towards its first recession, Trichet is finding it difficult to protect the economy from the global credit crunch but at the same time having to fight inflation.

It is predicted by all 58 economist surveyed by Bloomberg that the benchmark rate will remain unchanged today at 4.25 percent, with a cut predicted by December.

Yesterday in Europe the manufacturing PMI dropped to 45 in Sep down from 47.6 in Aug. Unemployment also rose to 7.5% in Aug being the highest level since Apr 2007. This is further support that the euro-zone is heading for a recession after the economy contracted in the second quarter of 2008.

In the UK the manufacturing PMI contracted at the fastest pace in 16 years to 41 in Sep compared to 45 in Aug, while the service industry stagnated in the 3 months up to July for the first time since 2002.

It was then the turn of the US to provide an update on the state of their manufacturing sector. The ISM factory index for Sep dropped to 43.5, the lowest level since Oct 2001. There was also the release of the ADP employment change, which showed that US workers continue to lose their jobs with an estimated 8k job cuts made in Sept.

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A week of wrangling over Fed bailout

This mornings financial news is again dominated by the €˜on again / off again US Treasury bailout.

Despite George Bush urging €˜swift action to avoid a €˜long and painful recession, wrangling over the details of the proposal has meant that Friday is now upon us, with still no deal confirmed.

The Republicans, while agreeing to a number of the Democrats demands which would see the Treasury buy up a number of banks €˜risky assets, are now attempting to put in place additional measures to prevent €˜excessive pay of bank executives who are involved in the scheme.

Whilst it seems likely that if Paulson is to get his wish of the near $750 billion bailout, his access to the funds will come in the form of staggered payments, rather than a lump sum.

Earlier yesterday, it had been thought that a deal was extremely close to being agreed, and both the Dollar and US equities rallied as a result, with the S&P 500 closing up 2% and the FTSE Eurofirst 300 rose 2.16% to 1,125.43.

However, the stalling of US politicians and failure to agree a deal has seen some of the Dollar strength and gains in equities reverse this morning. Some economists are now warning investors not to get too carried away by hopes of the US Treasury deal as worries regarding the wider global economy would not be going away any time soon.

This view was reflected in economic data released in the US yesterday. US New Home Sales fell in August to a 17 year low, dropping 11.5% to an annual rate of 460,000, the fewest since January 1991. Orders for Durable Goods in the US also dropped 4.5% in August, more than twice as much as had been forecast by economists, a clear sign that the tightening credit conditions had seen a cut back in spending.

These figures added to last weeks Initial Jobless Claims figure, which at 493,000 was the highest since September 2001, all point to the fact that the US economy is still very much stuttering along.

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Debate escalates on Fed bailout plan

Another day of falling crude oil prices and the morale boost investors experienced on reports of Warren Buffet's $5bn investment in Goldman Sachs saw the dollar gain ground against the euro and other major currencies yesterday.

First thing this morning the Pound regained its upward momentum against the dollar following comments from Bank of England member Andrew Sentance stating that the central bank must control its response to the financial crisis and remember its mandate of inflation control.

There has been a shift in thinking within the Bank of England to that of a more "€˜dovish stance". That said there is still a large proportion of people who believe the Bank of England will lower rates when they next meet on October 8th.

The ongoing debate between US Treasury Secretary Paulson, Fed Chairman Bernanke and Congress has seen scepticism from both Democrat and Republican politicians. Congressman from both sides wanted assurances that the Treasury Asset Relief Programme wouldn't result in a waste of public funds.

Paulson attempted to provide comfort by explaining “the program we have proposed is not a spending program. It is an asset purchase program, and the assets which are bought and held will ultimately be resold with the proceeds coming back to the government".

George Bush expressed his support through a broadcast to the nation on primetime television, urging them to back the plan in order to ease a “serious financial crisis".

Furthermore, John McCain emphasised that he was prepared to suspend his presidential campaign until a solution was agreed, pressuring Obama to do the same. The uncertainty surrounding which aspects of €œPaulson's Plan will be approved forced a flight to safety which saw interbank lending rates hit record highs yesterday.

Whilst economic releases continue to take a back seat in determining the direction of the markets, German IFO figures fell to a lower than expected 92.9 in September at€“ it's lowest rate since May 2005, pointing to the growing threat of recession in the Eurozone economy. US home sales also reported a fall to its slowest pace in 17 years.

Some key data out in the US today; New home sales, Unemployment claims and Core durable goods orders.

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BoE minutes as expected...retail sales to follow.

Yesterday, the BoE minutes confirmed what the market had been expecting with a 7-1-1 split, the majority sticking with the status quo and keeping rates on hold.

The hawk of the MPC, Tim Besley, voted for a hike arguing a pre-emptive rate rise would assist in halting inflationary pressures. David Blanchflower as usual cited downside risks to growth weighed far heavier than the inflation problem.

The rhetoric in the minutes echoed what was said in the inflation report, maintaining that there was greater downside risks to growth, that inflation would remain above the 2 percent target for the majority of the forecast horizon but that it will fall below this target at the 2-year mark.

Staying in the UK, CBI industrial trends came in slightly below market expectations at -13 yesterday and today we look to UK retail sales to give us direction.

Market expectations are for retail sales to decline again for the month of July following other recent weak data releases. The number surprised to the upside in May so it will be interesting to see how our capacity to spend faired last month.

Today in the Euro-zone, PMI surveys will give an indication of how manufacturing and services are fairing. The Market expects numbers to marginally decrease on the month in contradiction to the upbeat numbers released in the ZEW sentiment index on Tuesday.

Recent USD strength seems to have waned following slight rises in gold and oil prices taking other commodities with them. There are concerns too for the large US mortgage institutions and their ability to raise cash which is contributing to the dollars slowing pace.

US labour market weakness is expected to continue today with the release of initial jobless claims reporting around the 43k number with continuing claims expected to show an increase to nearly 3.5m. Later in the afternoon, we'll see the Philadelphia Fed which has been soft all year but might pick up a little following recent ISM readings around the 50 level.

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Wise Money sees up and downs like a yo-yo

Sterling's rise following the split MPC vote on Wednesday was short lived as UK retail sales data for June released yesterday plummeted.

Sales fell in all but one sector, with clothes, shoes and household goods sales severely hit. The sharper-than-expected decline drove the pound lower as investors bet the Bank of England may have to cut interest rates to bolster the economy.

The Office for National Statistics said retail sales volumes fell 3.9% in June, the sharpest fall since records began in 1986, after an upwardly revised 3.6% increase in May.

Analysts were expecting a fall of just 2.5% and an annual gain of 4.4% but annual growth was just 2.2% compared to 7.9% last time. While the Bank of England has given little sign that lower borrowing costs are on the way, because inflation is running at its strongest rate in more than a decade, most economists think rates will need to fall eventually.

It was also bad news for the Euro zone with German business sentiment declining sharply. The Ifo business climate index fell to 97.5 from 101.2 in June, its lowest level since September 2005.

Also of concern to policy makers at the ECB will be the fact that both Manufacturing and Service sector PMI indexes also fell in June. Services PMI declined to 48.3 from 49.1 in May its lowest reading for 5 years while Manufacturing PMI dropped to 47.5 from 49.2 - readings under 50 indicate contraction.

It wasn't any better stateside either. The US weekly jobless claims jumped by 34,000 to 406,000 from 372,000 the previous week and new home sales were down 2.6% in June to record their lowest level for 10 years.

With the crucial US Non Farm payroll numbers due out next Friday the jobless claims does not bode well. Wall Street closed 283 points lower on the back of the weak economic data and the record losses announced by Ford. The car giant's second quarter loss amounted to US$9 billion as sales of trucks and larger vehicles plummeted.

US crude oil prices bounced a little from recent lows to close at $126.15 yesterday with Brent crude also closing up at $126.96.

The Aussie Dollar has come under further pressure following an announcement by the National Australia Bank that they have written off A$798m in credit market related losses thereby increasing speculation that the Reserve Bank will need to cut interest rates sometime soon.

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Wise Money sees no surprises on Thursday.

Following the much hyped 25bps rate increase from the ECB yesterday, it seems Monsieur Trichet may have disappointed Euro bulls in the statement that followed.

With his moderate tones, he commented on the risk of further upside inflationary pressures but at the same time he remains concerned about growth, this along with his "no bias" sentiment put the euro immediately under pressure, not helped by a stronger US Dollar.

With perfect timing the Fed released the often volatile Non-farm payrolls at exactly 1:30pm. The jobs number for the month of June was bad but not bad enough to stifle the gains in the US dollar. Non-farm payrolls fell by 62k, the sixth consecutive decline in a row.

The April number was revised down from -49k to -62k while the unemployment rate remained at 5.5%, matching the highest level since October 2004.

Anything short of 100k had been viewed as being dollar positive and that is exactly how the market reacted. The biggest contributors were healthcare, education, leisure and government. The biggest losers were in goods producing and business services.

Elsewhere UK PMI services reported further contraction last month. Britain's dominant services sector shrank in June at its sharpest rate since the aftermath of the 9/11 attacks on the United States, a survey showed on Thursday, in a sign the economic slowdown is gaining traction.

However, signs from the CIPS services survey that companies are managing to ramp up their prices to partly offset record high cost inflation are likely to reinforce the view that the Bank of England is unlikely to cut interest rates any time soon.

The Bank's quarterly credit survey, also published on Thursday, showed the credit squeeze for households and businesses looked set to intensify over coming months as lenders braced for defaults amid a deteriorating economic outlook.

Today being a New York holiday should prove to be relatively quiet and there is a severe lack of data due for release.

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Oil price continues to strengthen

Global equity markets succumbed to a new sell-off at the end of last week amid jitters among investors over key economic releases and further oil price rises.

The US Labour Department on Friday reported a 0.5% increase in the unemployed American workforce (non Farm payroll) for last month, equating to 49,000 people losing their jobs.

This increase in the unemployment level was last seen in February 1986 and a level last encountered in October 2004.

Morgan Stanley (MS) issued a statement forecasting oil prices to breach the $150/barrel mark by July 4, this sent light sweet oil prices to $139 at the end of last week.

MS believe investors will continue to buy oil to hedge themselves against the foreseeable depreciation of the US dollar. The question is, how much this hedging is pushing the market against speculators pushing this oil price higher?

Closer to home the Bank of England is set to name its chief economist Charles Bean as deputy governor after a long standing dispute between the BOE and the Treasury.

This appears to be good news for Mr King as Mr Bean is his preferred choice of the two candidates.

In Europe it is well known that European central bankers have tended to follow the US Federal Reserve actions. However, comments made by Jean-Claude Trichet, ECB president indicated a misalignment in their interests.

Trichet signalled the ECB’s intentions to take a hawkish stance, by last week stating it was preparing to raise interest rates by 0.25% in July to curb the ever growing inflationary pressures within the Eurozone.

Trichet'€™s statement was soon followed by a 1.3% appreciation in the euro to 1.5749 US Dollars.

Sticking with currencies Sterling fell against the euro this morning which is the fourth consecutive day, dropping to £0.8014/euro. Against the dollar, it dropped to $1.9685, from $1.9708.

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Euro rallies on ECB rate rise hint

ECB President Trichet statements dominated the market yesterday after delivering surprisingly hawkish comments following a widely expected unchanged rate decision- leaving its key lending rate unchanged at 4%.

He indicated that some ECB officials argued for rate hike later this year, and that the central bank is in a state of "heightened alertness" over inflation. This caused the euro to strike back on foreign exchange markets on Thursday, bringing a speedy end to the US dollar's Bernanke-inspired rally while also advancing strongly against sterling.

This straight talking about the exchange of opinions by the ECB board members leading up to the rate decision suggest that there is an increased possibility of a rate hike in July/August.

On the back of a weaker dollar yesterday, Crude oil closed up $5.49 on the day.

The Bank of England also left rates unchanged at 5% on Thursday and is expected to remain on hold for some time as the country faces the combined effects of slowing economic growth and soaring inflation.

However, while most economists agree that near term inflation expectations will probably keep the BOE from cutting rates in the near term, expectations of a further deterioration in economic conditions is likely to bring rate cuts back on the table by year-end. Time will tell.

The US non-farm payrolls report is out today, this is one of the most critical releases for the US dollar, not only because it is market-moving, but also because it can help us gauge the broad status of the economy.

Currently, the consensus estimates are for a drop of 60K, which would mark the fifth consecutive month of job losses. Regardless of how payrolls fare, the news is likely to spark significant volatility.

The National Bureau of Economic Research believes that over the past 3 decades, the US economy has gone through 3 recessions. In each of those 3 recessions, there was a string of job losses that lasted for a minimum of 10 months.

So far, non-farm payrolls have fallen negative for the past 4 months, and the May report is anticipated to bring this tally up to 5.

Some argue that the current downturn in growth could be more severe than the recession in the early 2000s due to the triple blow of a housing crisis, credit crunch and skyrocketing commodity prices.

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