1. Jobs Fall Impacts U.S. Dollar, Treasuries, Fed Rate

The Labor Department announced today that employers hired less in May, taking on a mere 75,000 new workers during the month - 100,000 less than predicted.

It was the smallest amount since October, "when hiring practically stalled as companies were jolted by fallout from the Gulf Coast hurricanes. Job gains for March and April turned out to be weaker than previously reported,"according to the AP.

The news service reports that wage growth has stalled a bit - a development that is expected to allay concerns about soaring inflation - while the U.S. unemployment rate unexpectedly dropped from 4.7% in April to 4.6% in May, the lowest since the middle of 2001. The AP does point out that since the data came from different sources, the overall picture could be somewhat muddied.

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Meanwhile, the payroll data had even more wide-ranging and potent effects.

"U.S. Treasury debt prices surged Friday after May non-farm payrolls data came in weaker than forecast, suggesting the Federal Reserve may not have to raise interest rates any further to cap economic growth,"according to Reuters.

"Benchmark 10-year notes were trading 11/32 higher in price for a yield of 5.06% from 5.10% late Thursday, while two-year notes were 3/32 higher for a yield of 4.97% from 5.03%."

The surprising employment news, which seem to indicate a future slowing or stoppage of the Fed's monetary tightening, also affected the U.S. dollar, as the currency "fell 0.8% against the euro, more than a cent after the data, to $1.2926, 0.5% against the yen to Y111.87 and 0.8% versus sterling to $1.8621,"according to the Financial Times.

The paper cited a report from the European Central Bank suggesting that any unraveling of global imbalances - including the massive U.S. trade deficit and huge surpluses in Asia - has the potential to create "significant downward pressure" on the dollar.

Regarding interest rates, the paper says that based on the Fed funds futures, the likelihood of a June rate hike "fell to 46% from 68% just before the employment data, and 80% earlier this week."

"Despite the decline in the unemployment rate, the data really does suggest that the door is wide open for the Fed to pause,"John Canavan of Stone McCarthy told FT.

Editor's Note:

• Anticipating a shift in the job market, Triple Edge Alert picked up options on staffer Manpower Inc. (MAN) in July of last year. Eleven days later, TEA grabbed profits of 460%. See what other options Triple Edge is recommending.

2. Zinc Prices Threaten the Penny

Producing one penny costs more than the coin's value.

And one congressman wants to eliminate the coin for good, reports CNNMoney.com.

The penny is made up of 97.6% zinc and 2.4% copper. The composition of the coin changed from mostly copper to mostly zinc in 1982. That's because the price of copper was outpacing the value of the penny. Now, the same thing is happening to zinc.

The cost of producing the coin rose to 1.4 cents per penny this year. That's up from .97 cent per penny in 2005, as zinc prices doubled in six months.

According to CNNMoney, the U.S. Mint is spending an extra $14 million producing pennies this year - that's a whopping $44 million on penny production. The Mint, says CNNMoney, does not stockpile zinc, therefore making the cost of production vulnerable to swings in the metal's price.

In part, that's why Rep. Jim Kolbe, a Republican from Arizona (the nation's largest copper producer), is reintroducing legislation to get rid of the penny.

Kolbe first introduced the Legal Tender Modernization Act in 2002, proposing that cash transactions be rounded up to the nearest 5 cents (a nickel is made of mostly copper).

The Act didn't pass at the time. It didn't have a co-sponsor, nor did it receive any support, says Mark Weller, executive director of Americans for Common Cents, a pro-penny organization that represents coin collectors and zinc producers. "Americans overwhelmingly want the penny,"said Weller to CNNMoney. "They also hate rounding."

A poll conducted by CoinStar in February 2006 shows 66% of Americans favor keeping the penny in circulation, according to the company's press release.

But Kolbe thinks he has a chance at passing the legislation now because it's costing taxpayers money. The issue "used to be an oddball thing that Kolbe had an obsession about,"the congressman said of himself. "Now it will become a necessity. We'll be compelled to change."

However, those in the know don't think that Kolbe's legislation is going to pass. Josh Kurtz, politics editor at Washington, D.C.-based Roll Call, tells CNNMoney: "It's a noble effort, doomed to defeat. Congress is pretty reluctant to tinker with the nation's monetary system."

In addition, CNNMoney points out that the $13 million we could save by eliminating the penny is a drop in the bucket compared to an $8.3 trillion national debt.

Still, if the cost of zinc skyrockets even more, look for Congress to possibly think about changing the penny's composition again. And hang on to your pennies.

You just may be able to make some money by melting them down.

Editor's Note:

• The bull market in commodities is not over. Find out what the top 5 locked-in profit trends are. Go here now.

3. Pulte Homes Cuts Outlook

Homebuilder Pulte Homes cut its second-quarter and full-year profit outlook today, citing higher interest rates and the slowing U.S. housing market.

Pulte said its second-quarter profit is expected to come in at 85 to 95 cents per share, down from $1.00 to $1.10 per share. For the full year, earnings are expected to be $4.70 to $5.00 a share, cut from an earlier guidance of $6 to $6.25 a share.

"Demand has been impacted by a number of factors including an increase in available inventory of new and existing homes, higher cancellation rates and higher interest rates," said Richard J. Dugas Jr., president and chief executive, in a statement.

The company said that orders for homes fell in April and May. Pulte said that preliminary new orders for April and May slid 29% compared to a year earlier. The cancellation rate for new homes climbed to 27.4%, up from 14.8% a year ago.

"There's a lot of inventory and the market's slowing," Thomas Leritz, Argent Capital Management portfolio manager, told Reuters. "Consumer sentiment is negative on housing. Every day you look at the newspaper, you read a magazine or watch TV, you see some comment about how the housing market is a bubble. People are scared."

Pulte's shares fell 3.5% on the news. And the Dow Jones U.S. Home Construction index fell to its lowest point since 2004.

Editor's Note:

• Sir John Templeton was right. A housing bust is imminent. Templeton first warned housing prices could crash 50%. Find out what he said and learn how to protect yourself and even profit from the coming storm. Go here now.

4. Buck Convention to Preserve Retirement

With a waning outlook for future pensions and Social Security benefits, couples are taking more responsibility for their own savings and investments to get them through retirement.

USA Today's Kathy Chu suggests that future retirees should perhaps change their strategies, citing experts who say it might be wise to go against the accepted way of doing things.

"The oft-repeated rules about how much income you'll need in retirement and when to withdraw it are being upended. 'Always question the conventional wisdom,' says Sandeep Singh, a finance professor at the State University of New York College at Brockport. 'There are tax and investment issues to consider' in retirement planning,"according to Chu.

Chu cites financial planner Rebecca Pace, who says that "people will delay retirement strictly because of how complex" retirement cost calculations are. Says Pace: "They'll be 65, thinking about retirement, see all the (cutbacks to retiree health care and pension benefits) and think: 'I'm going to keep working.' "

Almost 80 million baby boomers will turn 60 this year, and the article provides a few tips to help them nurture their nest eggs.

First, Chu challenges the idea that "you'll need only 60% to 80% of pre-retirement income to keep your current standard of living once you retire." Hobbies, foreign trips and any number of other unexpected costs might mean that you'll need perhaps more than you were making in the first place.

"The thinking is that, if you and your spouse were spending $5,000 a month when you were working, you'll spend a similar amount in retirement,"writes Chu. "So, if you think you'll have 30 years in retirement, you could need $1.8 million in savings to maintain your standard of living. You'll have to take into account inflation and expected annual investment returns to figure out how much you need to save up before you retire."

She adds that many experts would suggest using regular accounts before tax-advantaged ones - but they could be dead wrong. "The thinking is that the tax-advantaged money can grow over a longer period, allowing your assets to last longer. Yet research suggests this system for withdrawal might not always be best."

Editor's Note:

• Retiring baby boomers are going to put an even bigger strain on pension funds. This report tells you how to prepare before its too late.

Editor's Notes:

• Anticipating a shift in the job market, Triple Edge Alert picked up options on staffer Manpower Inc. (MAN) in July of last year. Eleven days later, TEA grabbed profits of 460%. See what other options Triple Edge is recommending.
• The bull market in commodities is not over. Find out what the top 5 locked-in profit trends are. Go here now.
• Sir John Templeton was right. A housing bust is imminent. Templeton first warned housing prices could crash 50%. Find out what he said and learn how to protect yourself and even profit from the coming storm. Go here now.
• Retiring baby boomers are going to put an even bigger strain on pension funds. This report tells you how to prepare before its too late.
• The newest scientific and medical research now points to a link between infections and diseases you've never associated with them. Protect your health now.