NEW YORK Job growth in May was the weakest in a year and employers added far fewer jobs in the prior two months than previously reported, suggesting the economic recovery was faltering.
TOM DONINO, CO-HEAD OF TRADING AT FIRST NEW YORK SECURITIES IN NEW YORK
"Fairly obvious the report was quite weak. The market is unhealthy at best. I highly doubt the selling will abate today. I can't see any reason why we would turn around, especially with all the European turmoil going on. I don't think you've seen the type of trade that would indicate a bottom. That would come south of 1,250."
JACK ABLIN, CHIEF INVESTMENT OFFICER, HARRIS PRIVATE BANK IN CHICAGO
"It was a lousy number but one that was consistent with the lousy Philadelphia Fed number that came out a few weeks ago.
"It certainly suggests that perhaps the softness in Europe is either influencing the U.S. or that the U.S. recovery may not be strong enough to overcome the softness in Europe.
"I don't think the Fed will respond necessarily to economic numbers but if they feel that there's a stress on the U.S. financial system they will respond.
"I underestimated the relationship or the alignment of the world markets to the European markets. I felt that Europe could potentially proceed in their own little corner of the world. For right now anyway it just doesn't seem that way."
DOUGLAS BORTHWICK, MANAGING DIRECTOR, FAROS TRADING, STAMFORD, CONNECTICUT
"The non-farm payrolls number gives considerable political capital to the Federal Reserve to announce further quantitative easing. The actual number, along with the revisions, paint a gloomy picture of U.S. 'recovery.' I am concerned about the recent flight to quality seen in the US Treasury space. More and more people are crowding into a shrinking asset space, where the economies (U.S. and German) are not faring as well as most had hoped. As the dollar reaches peaks for the year, further QE could see this position under extreme stress."
THOMAS SIMONS, MONEY MARKET ECONOMIST, JEFFERIES & CO, NEW YORK
"Payrolls were weak and there were downward revisions to the April data. Earnings were weak and the workweek declined. Combined with the fact that inflation is now below the target, the chances of the Fed easing at the June 19-20 meeting have just increased."
TOM PORCELLI, CHIEF U.S. ECONOMIST, RBC CAPITAL MARKETS, NEW YORK
"This is clearly not good, especially taken in the context of the overnight data out of Europe showing slowing PMIs. It is increasingly obvious that we are in the midst of a global economic slowdown. This puts the Fed firmly in play and they will likely feel compelled to respond. The missing ingredient preventing the Fed from action had been the equity market, but now we are seeing it softening. Equities are falling and that was the last hurdle for Fed policy action because all the other criteria have been met."
BORIS SCHLOSSBERG, DIRECTOR OF FX RESEARCH, GFT, JERSEY CITY, NEW JERSEY
"It's pretty horrid but not unexpected. What we are seeing is the lingering effects of higher gasoline prices earlier in the year. That dampened demand and made employers much more cautious. For now, the risk currencies remain very much under pressure because the last hope of the bulls was the U.S. economy and it is showing signs of slowdown just like the rest of the world."
JOHN KILDUFF, PARTNER, AGAIN CAPITAL LLC IN NEW YORK
"The negative employment data caps the recent deterioration in global economic data. From China to Europe to the U.S., all the data have shown real slowing.
"Energy prices had been underpinned by moderate growth expectations. The poor jobs data bodes poorly for gasoline demand, as well.
"Lower energy prices will be the only silver lining for the economy in the near future."
RICK MECKLER, PRESIDENT, LIBERTYVIEW CAPITAL MANAGEMENT LLC, JERSEY CITY, NEW JERSEY
"It's an awful number. Not only is it awful in its numerical terms, it comes at a very skittish time in the markets because of the European crisis.
"The hope for the U.S. investors had been that the U.S. economy at least could continue its growth even as Europe was declining. A number like this brings concern about a global slowdown. The time has probably come to for some new government action in the U.S., Europe and China."
WILLIAM LARKIN, FIXED INCOME PORTFOLIO MANAGER, CABOT MONEY MANAGEMENT, SALEM, MASSACHUSETTS
"It just confirms that we are in a soft spot again, which is probably driven by the uncertainty in Europe and also by the political overhangs with the fiscal crisis and the debt ceiling and the tax problems and the election."
MALCOLM POLLEY, PRESIDENT AND CHIEF INVESTMENT OFFICER OF STEWART CAPITAL ADVISORS IN INDIANA, PENNSYLVANIA
"Wow, this is ugly. It seems to indicate that the economy is slowing. Some had believed that we had decoupled from China slowing and all the problems in Europe, but that seems to be short-sighted. We're slowing alongside the rest of the world."
STOCKS: U.S. stock index futures added sharply to earlier losses after the payrolls data.
BONDS: U.S. Treasury debt prices extended gains, pushing the 10-year yield to a record low beyond 1.5 percent.
FOREX: The dollar extended its earlier losses versus the yen, falling to a session low against the Japanese currency. The euro briefly fell to a session low versus the dollar before trimming losses.
(Americas Economics and Markets Desk; +1-646 223-6300)