What Today's Jobs Report Means for Stocks

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.

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