US stocks little changed, even as the monthly jobs report takes the unemployment rate over 10% for the first time since the early ’80s, in the latest sign of weakness in the broad economy.
DJIA adds 17 to 10023, S&P 500 gains 3 to 1069, Nasdaq Comp’s up 7 to 2112. Markets bounce around in the morning, but are flat all afternoon, odd given how volatile they’ve been lately. Which is strange, seeing as the jobs report this morning was pretty bad. A selloff would be understandable, and even a rally could’ve been explained; after all, a weak economy means the Fed keeps the easy money flowing. But this? No reaction at all? It’s just strange.
Still, the Dow broke a two-week losing streak, gaining 3.2% the past five sessions. The index is up 53% from its March low, and 14.2% for the year.
In today’s edition of Tomorrow’s News Today, Madeleine and I discuss how today’s jobs report is a picture that shows the economy is weaker than the experts think, and that means the feds aren’t about the start easing off the stimulus gas pedal any time soon.
It’s the first Friday of the month, which means only one thing: another ugly jobs report.
Piggybacking off of Paul’s earlier post, the unemployment rate rises to 10.2% – the highest level in more than 26 years – highlighting the depths of this recession.
U-6, the broadest measure of unemployment, climbs to 17.5%, the average workweek remains flat, and, as Miller Tabak’s Dan Greenhaus points out, the length of time an unemployed person is out of work rises to 26.9 weeks from 26.2 weeks last month.
It’s rather remarkable that the average unemployed individual remains jobless longer than their initial round of unemployment benefits lasts, he notes.
It’s also interesting that the sectors that supposedly were rebounding – construction, manufacturing and retail – saw the biggest job losses.
Retailers, for example, shed nearly 40,000 jobs in October, more than 20% of the month’s total job losses. The decline shows retailers are not planning ahead for the holiday season in terms of hiring and raises further questions about just how many people they will add.
Hirings are a gauge of what kind of business retailers expect to do during what is usually the busiest buying season of the year. Right now, the picture looks bleak.
So President Obama is going to sign a bill today to expand the home-buyer tax credit through April. If you thought the previous tax credit was bad policy (and if you did, you likely weren’t involved in the housing industry,) then you’re gonna love this one.
Notice I didn’t write “first-time home-buyer tax credit.” Congress and President Obama, not content with merely propping up the housing market artificially, actually had the gall to extend and expand the credit. Now, not just first-timers can qualify; even people who bought a house (but haven’t lived there more than five years) can qualify. Even couples who make a combined $225,000 can qualify for the credit.
Listen, if you’re making $225 grand a year, you do not need government assistance to buy a house.
And don’t think the industry isn’t going to pump this one for all it’s worth, just like the last one. The National Association of Realtors was banging the drum on an extension for months. This morning, an email from the CMPS Institute — the CMPS stands for Certified Mortgage Planning Specialist — hit my inbox.
The unemployment rate jumped sharply in October, to 10.2% from 9.8%, the Department of Labor reported, hitting a 26-year high and putting an exclamation point on just how deep this recession has been.
And there are other numbers in the report you should reflect upon. For one thing, the broadest measure of unemployment, which the department labels U-6 (the “official” rate is U-3), jumped to 17.5% from 17%; this includes unemployed plus “marginally attached” and forced part-timers. That’s roughly 26 million Americans unemployed or underemployed.
Even worse, hours worked remained at a flat 33, which, if memory serves correctly, is the record low on this measure. That means employers are not yet in any large measure even increasing the hours of the part-timers they have on staff, which everybody expects will precede a pick-up in full-time hiring.
Those two things together paint a picture of an economy in which there is absolutely no wage pressure; average weekly earnings were up only 0.9% from a year ago.
But as unfortunate as it is to see another 200,000 Americans lose their jobs in a month, the broader questions now are this: when will hiring pick up, and how fast will the economy need to grow the get people back to work.
After yesterday’s beefy rally, the question heading into today’s October non-farm payrolls report is whether bulls still have any dry powder left. And how “strong” does the report need to be for US stocks to run higher?
Expectations on headlines is 175,000 jobs lost, unemployment rate at 9.9%. We’re most curious to see prior month revisions, length of the work week and the broader U-6 measure of “labor underutilization,” which stood at 17% in September.
September wholesale trade data due at 10:00 a.m. ET, and consumer credit figures set for 3:00 p.m. That last one often gets overlooked because of the hour it’s released, and because usually it’s a snorer, but this one should get your attention, because it’s likely to show an eighth straight month of contracting credit, and that has not happened since the Fed started tracking it in 1943.
US dollar index a shade lower. S&P futures up less 1.70; DJ futures up 13. Ten-year higher, yield at 3.52%.
J.P. Morgan reported some strong earnings today. But what this bloggers eye were some of the sub-numbers in the earnings report. The bank booked $1.8 billion in investment banking fees. But don’t be fooled – that wasn’t from big M&A advising. But $429 million was in advisory fees. Instead, that $1.3 billion + remaining fees […]
David Oreck, founder of a well-known maker of vacuums and air purifiers, says he’s upset his namesake company is in bankruptcy. He says Nashville, Tenn.-based Oreck Corp. was a perfectly profitable company when he sold his stake in it to a private equity firm in 2004. He blames the firm, New York-based American Securities Capital […]
