The volcano erupted during the week as debt issues in Europe’s periphery created panic through the globe and asset markets acted accordingly. The currency markets, the commodity markets and the equity markets froze, as there seem to be no bids, as the markets swooned on Thursday. Corporate debt and interbank lending in Europe, also froze, reminding investor of the days after the Lehman Brothers default.

US See Robust Job Growth

Job growth in the United States increased by 290,000 jobs in April, greater than the 176,000 jobs that economist had expected. During the same period, the unemployment rate ticked up to 9.9%, from the 9.7% rate during March. The reason for the increase in the unemployment rate was the large increase in the number of workers who according to the household survey are now relooking for employment opportunities. 800,000 people, who had previously stated that they were not looking for work, began to look for jobs in the month of April. The U.S. economy has lost nearly 8.5 million jobs over the past two years, more than half of today's total unemployed. Although the downturn probably ended 10 months ago, companies have been reluctant to ramp up hiring as they await for more evidence of a stronger economy. In the meantime, they are focusing on producing more with fewer workers. For the second consecutive month, the US economy grew more than 200,000 jobs. The March payroll number was revised higher from 162,000 to over 200,000. The private sector has added 400,000 jobs in the March-April period. Manufacturing added 44,000 jobs, more than twice the expected level. This bodes well for industrial output and another increase in capacity utilization. Construction added 14,000 jobs and this may indicate steadier construction spending. Temp workers increased by another 26,000. The overall data should set the tone for much of the April economic data and should reinforce the sense that a cyclical recovery is taking hold in the US. Total government employment, which include state and local jobs, rose by 59,000, helped by the influx of the Census workers. The decennial Census accounted for 66,000 of the employment boost last month. As those jobs will be lost in the second half of the year, some economists cautioned not to read too much into the headline figure. Census hires in March were 48,000.

William Pars
Exto Capital