No lucky break for investors today. The jobs report released this morning announced non-farm payrolls had only risen by 80,000 jobs, below projections of 100,000 new jobs. While many investors expected a number below the forecast, the markets still dropped. As of 11:45 a.m. EDT, the Dow Jones Industrial Average
The report also released updated figures for the previous two months: April's payroll change was revised to 68,000 from 77,000, while May's figure was bumped up to 77,000 from 69,000. While June did have better figures than the previous two months, the second quarter, with an average job creation rate of 75,000 per month, still pales compared to the first quarter's pace, when an average of 226,000 jobs were created each month. These negative numbers put additional pressure on the Fed and Ben Bernanke to deliver further stimulus and rev up our sputtering economy.
One positive sign is that the labor force grew by 156,000 in June, adding to a 1.66 million increase in the past year. This means that many workers who had previously left the workforce out of frustration are rejoining the battle, and now it's a matter of matching workers with positions, a task easier said than done. Companies seem hesitant to invest in new hires, as there were 3.4 million job openings at the end of April, according to the Bureau of Labor Statistics. This frictional unemployment is to be expected, although the delay may be longer than normal with companies spending less on recruiting or waiting longer for the right candidate. A second silver lining is that private sector jobs have increased more than the general payroll numbers, but public sector layoffs pare the gains in the private sector. This is an unavoidable result of trying to stabilize government revenue through austerity measures, as the government has cut 1.04 million jobs since May 2010.
The market in focus
Aluminum producer Alcoa
The technology sector decreased the most, falling 2.15% in aggregate. Microsoft, Intel, and IBM were all down around 2%, but none suffered as much as Hewlett-Packard
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Charlie Kannel owns no shares of the companies mentioned above. The Motley Fool owns shares of Microsoft, McDonald's, and International Business Machines. Motley Fool newsletter services have recommended buying shares of Microsoft and McDonald's. Motley Fool newsletter services have also recommended creating a bull call spread position in Microsoft and a synthetic long position in International Business Machines. The Motley Fool has a disclosure policy.
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