What Today's Jobs Report Means for Stocks

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

I don't know about you, but there are few things that belatedly ring in the new year like the monthly jobs report from the Labor Department. OK, perhaps that was a bit of an exaggeration, but it still can't be denied how important the report is for traders and investors.

The headline jobs number for the month of December is 155,000. To those of you fortunate enough not to know what this refers to, it's the increase in U.S. nonfarm payrolls last month -- that is, the number of new jobs that were created, excluding farm work.

Standing on its own, of course, this figure means next to nothing. As my colleague Mike Klesta pointed out this morning, in a nation of 143 million workers, 155,000 new jobs is a mere drop in the bucket. What's more important, in turn, is the trend.

Source: Bureau of Labor Statistics.

And as you can see, the trend is definitely going in the right direction, albeit gradually.

Breaking it down a bit further, private sector businesses took the lead in job formation by creating a total of 168,000 positions. The health care sector added 45,000, the construction sector advanced by 30,000, and manufacturing payrolls increased by 25,000.

Meanwhile, government payrolls continued to contract, notching a net decline of 13,000 last month. Local government jobs decreased the most, falling by 14,000, while the federal workforce shrank by a net 3,000 positions. Accounting for the difference, the number of state-government jobs actually increased.

All told, in turn, the nationwide unemployment rate remained steady at 7.8%. According to Secretary of Labor Hilda Solis: "December's report marks 34 straight months of private sector job growth, which have added close to 5.8 million jobs. For nearly three years, steady gains have occurred across different sectors of the economy, and December finishes a strong year of consistent growth with average increases of about 160,000 private sector jobs per month in 2012."

In terms of individual stocks, technology companies are among the worst-performing stocks on the Dow Jones Industrial Average (DJINDICES: ^DJI  ) , with Microsoft (NASDAQ: MSFT  ) and Intel (NASDAQ: INTC  ) down by 1.1% and 1%, respectively, in midday trading. Both of these companies are fighting against the negative trends in the personal computer industry, which saw steep sales declines last year.

Leading the gainers, alternatively, are Disney (NYSE: DIS  ) and Alcoa (NYSE: AA  ) . Suffice it to say, both of these companies stand to benefit from the improving employment picture in the United States, as Disney relies on discretionary income to grow and Alcoa benefits tremendously from increased car sales.

Beat the market!
The Motley Fool wants to give you a 98.79% chance at beating the market. If you're interested in the best odds in the universe -- including more than a 70% chance at DOUBLING the market's return over the long haul -- here's some very good news for you... Motley Fool Supernova is re-opening to new members for the first time ever on Jan. 15! Get instant and free access to learn how you get these kind of market-beating odds by clicking here now

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2179446, ~/Articles/ArticleHandler.aspx, 9/29/2016 8:23:03 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated Moments ago Sponsored by:
DOW 18,143.45 -195.79 -1.07%
S&P 500 2,151.13 -20.24 -0.93%
NASD 5,269.15 -49.39 -0.93%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/29/2016 4:00 PM
AA $9.96 Up +0.08 +0.81%
Alcoa CAPS Rating: ***
DIS $91.80 Down -0.40 -0.43%
Walt Disney CAPS Rating: *****
INTC $37.32 Down -0.12 -0.32%
Intel CAPS Rating: ****
MSFT $57.40 Down -0.63 -1.09%
Microsoft CAPS Rating: ****