Happy Friday -- jobs Friday, that is!
The first Friday of everything month is always a widely anticipated date, as it marks the official release of the preceding month's jobless figures. Following positive news on this front today, the market has responded in kind. As we approach the lunch hour on Wall Street, the Dow Jones Industrial Average (^DJI -0.84%) is higher by 40 points, or 0.3%.
November jobless figures
Data released this morning suggests that domestic job growth picked up last month, leading to a lower unemployment rate. According to the Labor Department -- click here for the official press release -- U.S. nonfarm payrolls increased by 146,000 in November. This was nearly double the 80,000 jobs expected by economists in a survey by Dow Jones Newswire. Thanks in part to this gain, the unemployment rate, which is obtained via a separate survey of U.S. households, fell to 7.7%, down from 7.9% in October. As you can see below, this is the lowest unemployment rate since the end of 2008.
U.S. Unemployment Rate data by YCharts.
In prepared remarks announcing the figures, Secretary of Labor Hilda L. Solis said:
Job gains were reported last month in nearly every hiring category. Hiring in the business and professional services sector is back to its pre-recession peak. Consumer confidence is high, and Americans are shopping again. Last month retailers added 53,000 jobs in anticipation of increased holiday sales.
The results come as a relief, as many economists believe Superstorm Sandy had seriously depressed job creation, particularly in the crucial Northeast region. Earlier this week, a report from payroll processing company Automatic Data Processing estimated that a comparatively modest 118,000 private-sector jobs were added last month, a far cry from the Labor Department's 146,000. While ADP estimated that Sandy reduced payrolls by 80,000, the government said it didn't affect the unemployment rate.
Consumer confidence plunges
In slightly less upbeat news, the results of a survey out today show that consumer confidence has plunged thanks to uncertainty surrounding the fiscal cliff. A preliminary reading of the Thomson Reuters/University of Michigan index of consumer sentiment shows that the figure came in at 74.5, down from 82.7 in November. This is the lowest level since August. According to survey director Richard Curtin, "Confidence plunged in early December as consumers confronted the rising likelihood that political gridlock would push the country over the fiscal cliff."
Needless to say, this is a particularly bad time of year for consumers to be overly cautious, as many retailers look to the period between Thanksgiving and Christmas for a incongruous amount of sales. In an effort to extend the season, big-box retailers like Wal-Mart and Target flung open their doors on Thanksgiving day. And even ailing businesses like Best Buy are getting into the holiday spirit by offering to match the prices of online competitors such as Amazon.com.
Corporate news
In individual company news, financials are higher today on the heels of the upbeat jobs report. JPMorgan Chase (JPM 0.06%) and Bank of America (BAC -0.85%), the nation's two largest banks by assets, are up 2% and 0.9%, respectively, in intraday trading. Both of these companies have had a phenomenal year. In the third quarter, JPMorgan reported record earnings. And Bank of America is the Dow's best-performing stock in 2012, up a staggering 89% since the beginning of the year, leading me to predict last month that it may have finally turned the corner.
Heading down, alternatively, are telecom Verizon (VZ -0.44%) and software giant Microsoft (MSFT -2.49%). It was announced yesterday that Verizon's competitor T-Mobile USA will finally be getting the coveted iPhone. T-Mobile is the last of the major domestic wireless carriers to land a contract with Apple (AAPL 0.56%), increasing the pressure on Verizon. Meanwhile, Microsoft continues to combat questions about its newest operating system release, Windows 8, and the commercial viability of its new tablet, the Surface.
