Mid-Day Recap: Post-Employment Report Stock Sell-Off is Modest
This morning’s employment report was called “terrible,” “dreary,” “bleak,” and “painful,” but halfway through the session equity markets are only modestly lower. It appears that yesterday’s 2.6% setback in the S&P 500 was deep enough to satisfy investors who believe the stock market had overheated.
As of 12:30, the S&P is down 0.23% to 1,027, the Dow is trading 0.11% lower at 9,498, and the NASDAQ is down 0.12% to 2,055.
The Bureau of Labor Statistics said 263,000 jobs vanished in September, almost one-hundred thousand worse than the market forecast. New job cuts pushed the unemployment rate up one-tenth to a fresh 26-year high at 9.8%.
A double-digit unemployment rate is expected before 2010. The most recent jobless claims report said around 550,000 Americans are filing for first-time benefits each week, and signs of job hirings are few. Indeed, today’s report said more than one-third (35.6%) of the unemployed have been jobless for 27 weeks or more.
“There was nothing to support the view that the economy will be adding jobs before the end of the year,” said Brian Bethune from IHS Global Insight. “And nothing to support the view that the consumer can sustain the spending increases that we saw in August – employment and hours worked were down, and hourly earnings only inched higher, implying that wage and salary incomes fell.”
Since the recession hit the economy in December 2007, the number of unemployed persons has increased by 7.6 million to 15.1 million, and the unemployment rate has doubled. Moreover, the all-in unemployment rate â€
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