A curious day for US stocks, which manage to hold to only modest losses after a surprising jobs report comes in far weaker than expected.
DJIA loses only 22 to 9487, after falling 79 early this morning. S&P 500 slips 5 to 1025, Nasdaq Comp eases 9 to 2048. Yesterday selloff absorbed a lot of the selling pressure; still, it’s relatively surprising that the market closed with such minor losses, given just how surprising that jobs report was.
And speaking of the jobs report, the economy shed 263,000 jobs in September, far worse than expectations of 175,000, and unemployment rate crept up to 9.8%. The widest measure of unemployment, which includes not only unemployed, but part-timers and marginally attached workers, hit 17%.
Everything in the report was bad: the workweek fell back to its record low of 33 hours. The idea was that improvement in this number would indicate employers were ramping up hours as business improved, a prelude to actual hiring. Well, so far that’s not happening.
The revisions were bad. July was revised to a loss of 304,000, from the originally reported 247,000. The BLS also said it’s likely that the economy shed an extra 824,000 jobs in the 12 months that ended in March, a far larger number than expected. It will report those revisions this upcoming February, but it appears the economy was even weaker than initially expected.
And fully one-third of the unemployed have been so for six months or more, meaning a lot of them are exhausting their benefits. While Congress may extend emergency benefits, that still leaves a lot of people struggling with a very tenuous lifeline.
People have said the recovery would be rocky, but if numbers like this persist, it may be more than rocky. It may be nonexistent.
So much for celebrating the Dow’s best quarter since 1998.
Stocks remain depressed – although well off session lows – as another disappointing monthly jobs report weighs on the market. The drop comes on the heels of Thursday’s 203-point sell-off that opened the fourth quarter – the largest decline since early July.
The Dow’s dropped in seven of the last nine sessions, creating cause for concern that the spring and summer rally that saw stocks jump 60% may have overextended itself.
Disappointing economic readings this week on consumer confidence and manufacturing set the stage for the monthly jobs report. BLS reported 263,000 jobs were lost in September, far worse than the 175,000 figure economists were expecting. And the unemployment rate also inched higher to 9.8%, which seems to have lots of folks chatting up a W-shaped recovery these days rather than the V-shaped one the bulls are hoping for.
Now more than ever the stage looks set for some sort of correction — which may have begun with yesterday’s vast sell-off, James Picerno writes at The Capital Spectator.
Somewhere in an empty field, there's a bandwagon for sale.
Anybody get the license plate of that truck that just ran down Wall Street?
Today’s September jobs report hit the Street like a right hook from Clubber Lang. The BLS reported the nation shed 263,000 jobs in September, far worse than the 175,000 most folks expected. That’s a reversal of momentum that will squelch a lot of the recovery talk.
We feared this could happen, as we intimated in yesterday’s market closer. More and more, it looks like that 9900 shot on the Dow last week was the top, at least the short-term top, and the market was poised for a big selloff on any disappointing data.
And what a disappointment. “The idea that the economy was on a self sustaining and uninterrupted path to recovery was doused with a big bucket of cold water today,” Miller Tabak’s Dan Greenhaus wrote. (Greenhaus is a prolific writer, and usually has a comment out about every data report 10-15 minutes after the release. The fact that it took an hour for today’s comment underscores just how bad it was.)
US stocks’ cascade into yesterday’s close, weakness in overseas markets and trepidation ahead of the September nonfarm payrolls report (8:30 a.m.) all part of a mix that has premarket equity futures pointed modestly lower. Commodities also sinking, with crude falling back under the $70/barrel mark.
With the jobs report, we remain most interested in underlying details such as the work week and total unemployed plus marginally attached and folks working part time but who want full time gigs (U-6). That measure was 16.8% in August. Also on the data calendar, August factory orders due at 10:00 am.
In August, the nation shed only 216,000, far removed from the nearly 700,000 they shed earlier this year. For September, the BLS is expected to report only 175,000 jobs were lost, a Dow Jones survey predicts. The number doesn’t necessarily need to nail 175,000 on the head, but it does need to come in better than 216,000 if we want to maintain progress on this front.
S&P futures down 3.80; DJ futures down 36. Ten-year continues to rally, yield down to 3.15%
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