SHANGHAI, May 7 (SMM) – US nonfarm payrolls were reported disappointing last Friday, causing market concerns over US economic growth and downward pressures on LME and SHFE base metals.
US Department of Labor reported May 4 that non-farm payrolls grew by 115,000 in April, the smallest gain since October 2011, and lower than the expected 170,000 jobs. The unemployment rate dropped to 8.1% in April, the lowest level since January 2009. The worse than expected nonfarm payrolls intensified market concerns over US economic recovery. In addition, the final reading of April’s Markit Eurozone Services PMI came in at 46.9, a full point lower than the preliminary reading of 47.9 reported two weeks ago, which itself was far weaker than any economist polled by Reuters had expected. In France, as Francois Hollande, the country’s new President, was not in support of cutting government’s financial spending, investors worried this may exert negative influence to the resolution of European debt crisis. In the UK, April house prices were down 2.4%, the biggest loss since September 2010, and down 0.6% from a year earlier. In addition, Eurostat Friday said the volume of retail sales in euro zone countries in March rose by 0.3% from February, but were down 0.2% from March 2011, representing slight improvements.
The negative economic data depressed stock and commodity markets, combined with the unimproved consumption, LME base metals were under great downward pressures, with base metals in Shanghai market expected to fall in the near term.