Saturday 7 July 2012

US employment disappoints but Japanese leading index and German industrial production rise

Economic data on Friday were mixed.

US employment growth was weak in June. The economy added just 80,000 jobs, fewer than the 100,000 projected by economists. The unemployment rate stayed at 8.2 percent.

Encouragingly, however, average hourly earnings increased to $23.50 from $23.44 in the prior month, the average work week rose six minutes to 34.5 hours and the number of temporary workers increased 25,200 in June following an 18,600 rise in May.

In Japan, the coincident index of economic indicators fell to 95.8 in May from 97.0 in April. However, the leading index rose to 95.9 from 95.6.

In Germany, industrial production rebounded by 1.6 percent in May after having fallen by 2.1 percent in April.

Still, markets were weak on Friday. Stocks and commodities fell, the S&P 500 declining 0.9 percent and oil dropping 3.2 percent. US Treasuries rose, with the 10-year yield falling five basis points to 1.55 percent.

European financial markets continued to show distress on Friday. Spain's 10-year yield closed at 6.95 percent, up 17 basis points, after hitting 7.04 percent earlier in the day. German 10-year yield fell five basis points to 1.33 percent while the two-year yield fell three basis points to minus 0.013 percent.

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