While you were sleeping: US 8.5% jobless rate, N. Korea rocket

Monday 6th April 2009

The US unemployment rate rose to 8.5% in March, the highest since 1983 as 663,000 jobs were eliminated and data was revised for January, showing the worst losses since just after WWII.

Payrolls for January were revised up to 741,000, the biggest monthly loss of jobs since 1949, according to Labor Department figures on Friday. Some 5.1 million jobs have disappeared since the world's biggest economy fell into recession, according to the department. The jobless rate matched economists' expectations.

A measure of people who have given up looking for work or are in part-time work rose to a record 15.6%.

America's services sector lost 358,000 positions after shedding 366,000 in February. Manufacturing sector lost 161,000 jobs in March, the second monthly decline of about that size, while the construction industry shed 126,000.

The US dollar rose against the yen after the jobs data amid relief the numbers weren't even worse. The euro gained after the European Central Bank cut interest rates less than expected.

The greenback strengthened to 100.3 yen from 99.52 and reached $1.3480 per euro from $1.3461. The euro climbed to 135.24 yen from 133.98.

A report from the Institute for Supply Management showed the US services sector shrank for the sixth month in a row.

Stocks on Wall Street closed higher on Friday. The Dow Jones Industrial Average rose 0.5% to 8017.59 and the Standard & Poor's 500 climbed about 1% to 842.50. The Nasdaq Composite rose 1.2% to 1621.87, helped by a 21% surge to US$59.29 for Research in Motion (RIM), maker of the Blackberry.

RIM said first-quarter earnings would be at least 88 cents a share, more than analysts had expected, as the company cuts costs and widens its profit margin.

Financials led the Dow higher after Federal Reserve Chairman Ben Bernanke said the Fed will do all it can to stabilize markets. Bank of America rose about 5% to US$7.60, Citigroup gained 4% to US$2.85 and JPMorgan Chase rose about 4% to US$29.28.

MGM Mirage soared 48% to US$4.65 after Bloomberg reported it has hired Morgan Stanley to evaluate bids for its casinos in Michigan and Mississippi. The casino company has received expressions on interest in some of its assets, according to the report.

US President Barack Obama said North Korea's launch of a Taepodong 2 missile, which flew across Japan, was a "provocative act" and a "clear violation" of Security Council resolutions.

"North Korea has ignored its international obligations, rejected unequivocal calls for restraint, and further isolated itself from the community of nations," Obama said in a statement.

North Korea said the rocket sent a satellite into orbit though the US says the so-called Hermit Kingdom is working to refine its long-range missile capabilities.

Japanese Prime Minister Taro Aso said the launch was "extremely provocative," though his nation chose not to attempt to shoot it down. A South Korean government spokesman said the launch was "a serious threat."

US Treasuries fell, pushing yields higher, amid speculation the US economy's slump may abate and as investors prepare for what may be more than US$50 billion of new debt on offer at auctions next week.

The yield on 10-year Treasuries rose 12 basis points to 2.90%.

Gold declined as weak jobs data failed to dent optimism that the worst of the financial crisis is over and global economic growth may revive.

Gold for June delivery fell 1.3% to US$897.30 on the New York Mercantile Exchange.

Crude oil dropped after the jobs report, amid concern the rising ranks of unemployed will be less inclined to fill their tanks with fuel. Crude for May delivery slipped 0.3% to US$52.51 a barrel on the New York Mercantile Exchange on Friday, rounding out a weekly gain of 13%.

Copper futures for May delivery gained 5.8% to $2 a pound on the New York Mercantile Exchange, the highest close for five months.

Europe's Dow Jones Stoxx 600 Index fell 1% to 186.17 on Friday. Novo Nordisk, a Denmark-based company that provides treatments for diabetes and hormone therapy, and Aker Solutions, a Norwegian engineering company, each dropped 14%, leading the index lower.

In the UK, the FTSE 100 fell 2.3% to 4029.67, led by a 5.6% decline for Randgold Resources. HSBC Holdings declined 5.3%. Xstrata fell 5.1% and BHP Billiton fell 4.8%.

Royal Bank of Scotland climbed 8.5% after chairman Philip Hampton said the lender plans to eliminate more jobs. Shareholders rejected the bank's report of executive pay in 2008 by a vote of about 90% in a sign of annoyance over former CEO Fred Goodwin's 703,000 pound pension.

The DAX 30 edged up 0.1% to 4384.99 in Germany. Daimler gained 5.9% and Commerzbank rose 5%. France's CAC 40 fell 1.1% to 2958.74. Gas company GDF Suez SA fell 4.5% and drug company Sanofi-Aventis slipped 3.7%.

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