Posted June 4, 2012 13:00

If you thought that the April jobs report was bad, then you are in for a real shock when you see that only 69,000 jobs were created in May. That isn’t a typo. This past month, the job market proved to us through the ADP Report (which measures private sector job growth) and the Non-Farm Payrolls, that the economy is weakening and officially has gone into a slowdown.

As May went along, you were able to see the ISM non-manufacturing index and other important federal reports show contraction in the US market. If you look at the Philly Fed Index, which looks at business sentiment, it reported a negative number. Art Cashin appeared on CNBC yesterday and said that if you look at the Philly Fed Index alone,  that would equate to around 25,000- 40,000 jobs created in the month of May. Well, he was right; if you only looked at that number, you would have seen a significant disappointment in the jobs number.

Now What?

Many investors are worrying that the recent slowdown in China and the impending Financial collapse in Europe could potentially have an additional negative impact on the US stock market. Last week in my blog I indicated that if the S&P 500 breaks below 1292, then the market could tumble some more. Now that it has fallen below that number, the market would need to find support at the 1275 (Egypt Low) and bounce off of it and stay above it. Otherwise, it might be a very long time before the market breaks trend and reverses to the upside. Let’s just hope that this isn’t the start of something bigger, like a global recession.