Question of the Week
Today marks the start of the last full week to file taxes. We have been seeing a decline in consumer sentiment lately, and the recent jobs report is certainly no booster. What do you believe needs to take place in order for consumers to invest their tax refunds into the economy instead of their savings accounts?
Maybe it was a good thing they released the March jobs report when they did even though the stock market was closed on Friday. It was a stinker and it would have ruined a lot of weekends. With 126,000 jobs added, the actual number was about half of the 245,000 consensus, and among the experts, it was the lowest tally since December's consensus of 213,000.
The number is so out of whack as the lowest analyst estimate on the Street was 190,000. Now, everyone's scrambling to find out what's next as it is harder and harder to ignore the never-ending string of economic disappointments. The irony is that the number makes sense when it is juxtaposed with everything we hear from Main Street and the recent actions of the consumer.
In this report, the devil was in the details as the key points were disappointing.
Key Points
- Labor Force -96,000
- Participation Rate 62.7%
- Hourly Wages $24.86 +2.8%
- Jan & Feb Revised -69,000
In fact, I am already seeing the experts and apologists playing the blame game. There's no doubt plunging oil is taking a toll on the industry, although the recent layoffs is not a part of the data. The strong dollar is to blame, even though we were told that it would be a boon for the economy and the consumer. Then, there was the weather…
However, I guess the experts cobbled together their consensus estimates from a beach in the Bahamas.
No one saw this coming…so now what?
The Economy Hits a Brick Wall
The economy has hit a brick wall; lost in the shock of the jobs numbers, the Atlanta's Fed release stated that the first quarter of the gross domestic product (GDP) would be 0.0%, which is a significant difference from the 1.9% at the start of the year.
First Quarter GDP | |
January 1, 2015 | 1.9% |
April 3, 2015 | 0.0% |
Just like that, it seems that all critical aspects of the economy came grinding to a complete halt, and in some cases, it has been in an absolute plunge-mode.
Technical Support
Right now, the supporting key points for the Dow are 17,635 and 17,164.
Today's Session
The markets have opened lower as anticipated with the lousy jobs report still pressing on the minds of market observers. Surprisingly, gold futures are trading near 3-week highs as the low jobs number indicates that the Federal Reserve should refrain from hiking rates in the near-term.