The big economic news of the week, as is always the case for the first Friday of any month, is the employment report. Released early Friday morning, May had a total of 431,000 growth in employment, but nearly all of that (411,000) was due to temporary hiring by the government of workers for the Census. Private sector employment grew by 41,000 jobs, which is disappointingly small and the unemployment rate barely moved at 9.7%, the same rate as for the first three months of 2010, with 15 million unemployed persons. The long-term unemployed, those unemployed for more than 27 weeks, was unchanged at 6.8 million persons.
The market, having had a huge and very broad rally on Wednesday, lost all of that and then some in response to the employment numbers on Friday. For the week, the Dow was down a total of 327 or 3.19%.
Large Cap US:
DJIA: 9931.97 (down 327 on the week)
SP500: 1064.88 (down 38.18 or 3.46% for the week)
Small Cap US:
IWM (iShares Russell 2000 ETF): $63.56 (down 5.3% for the week -- Friday hurt small-caps much worse than it hurt large-caps)
30-yr fixed mortgage rate: 4.79% (Freddie Mac PMMS)
15-yr fixed mortgage rate: 4.20% (down from 4.24%) (Freddie Mac PMMS)
Treasury rates: 05/28/10 1mo: 0.12; 3mo: 0.14; 6mo: 0.22; 1yr: 0.34; 2yr: 0.72; 3yr: 1.17; 5yr: 1.98; 7yr: 2.65; 10yr: 3.20; 20yr: 3.95; 30yr: 4.13%
* Treasury rates are down some from last week, almost all of the moves taking place on Friday. Note that the 5 year rate is now below 2% and the 20yr rate is below 4%. There was hardly any movement at the short end, as those rates are awfully awfully low already, and at the longer end, these are still very low rates to lock in for the long-term. One can easily do better than all those up to the 2yr or 3yr bonds via online savings accounts such as ING Direct, HSBC or Ally Bank -- all with FDIC insurance.
Treasury real rates (based on TIPs): 5yr: 0.32%; 7yr: 0.75%; 10yr: 1.26%; 20yr: 1.68%; 30yr: 1.77%
AAA Corporates: no data available at this time
AAA Municipals: 5yr: 1.92%; 10yr: 3.15%; 20yr: 4.89%
Unemployment (May 2010): 9.7% (Down from 9.9% in April) (See note above)
CPI-U: declined 0.1% in April, but increased 2.2% in 12 months. (reported 5/19/10)