The payrolls number shows that the economy added 288,000 jobs in April. That’s a huge piece of good news. But workers fled the workforce in huge numbers with the labor force dropping by 806,000 in the month. That had the effect of lowering the unemployment rate to 6.3% from 6.7% in March. But the number of people actually working in the U.S. economy fell by 73,000.
Even good news on initial claims for unemployment has not been able to turn a two-day rally in U.S. stocks into a three-day rally. With technology and momentum stocks leading the way lower—again—the NASDAQ Composite index is down 2.47% as of 2:15 p.m. in New York.
The U.S. economy added 192,000 jobs in March. That was slightly below the 195,000 expected by economists. The Bureau of Labor Statistics updated its survey for February to show the economy added 197,000 jobs that month and not 175,000. The official unemployment rate remained at 6.7%. Economists had expected the rate to tick down to 6.6%.
What we’re witnessing is gradual improvement in the range of the initial claims numbers. The claims numbers had been stuck between 330,000 and 340,000 in February with the 4-week moving average at 339,000 for the week ended February 29. But with this most recent weekly number and the March 8 reading, the 4-week moving average has inched down to 327,000
There was enough good news in the February jobs numbers to keep alive hopes that the recent sluggishness in the U.S. economy is “only cold weather.” But with the S&P 500 at new all-time highs this week, is that story enough?
This morning’s January jobs number was disappointing. The economy created 113,000 net new jobs against a consensus among economists surveyed by Briefing.com of 175,000. The very, very disappointing December total of 74,000 was revised upward, but only by a tiny 1,000 jobs. And yet the U.S. stock market is up strongly today.
I think tomorrow’s jobs number for January is likely to have a big effect on the markets. But I’m not sure we’ll really learn much of anything about the economy because of uncertainties in the data.
Explaining this jobs report is basically guesswork at this point. At this point we don’t know whether this very disappointing result is a significant data point that should lower projections of the economic trend or a one-off event that doesn’t say much of anything.
The market reaction to this morning’s jobs numbers is actually more interesting than the numbers themselves. Unlike other days this week when good economic numbers have pushed stocks and bonds downward–because the good news raised fears that the Federal Reserve might decide to begin to taper off its $85 billion in month asset purchases early—today’s good news is being treated as good news for the financial markets.
The U.S. stock market seems to like the lower than expected number of initial claims for unemployment reported today by the Labor Department. The problem is that the Labor Department has flagged the drop as, possibly, the result of seasonal adjustments from the November 11 Veterans Day holiday.
