Daily Market Commentary for August 5, 2011
Labor Department released U.S. nonfarm payrolls climbed 117,000 in July. (read more at Millennium-Traders.Com) http://www.millennium-traders.com/news/newscommentary.aspx
The unemployment rate fell slightly to 9.1%, in a better-than-expected report that temporarily calmed concerns about another recession. Even though employers reportedly hired more workers than economists expected, the gain wasnâ€™t big enough to alter disappointing labor-market trends. The jobless rate has remained above 8% for 30 straight months being the longest stretch of high unemployment since the Great Depression in the 1930s. Additionally, the drop in the unemployment rate in July stemmed mainly from a decline in the labor force as discouraged job seekers stopped looking for work. The rate of hiring in July was not enough to absorb the natural increase in the labor force, which requires about 125,000 new jobs a month.
Private sector companies hired 154,000 workers. Governments at all levels continued to trim jobs, putting the overall gain at the critical headline figure of 117,000. The largest increases occurred in health care (31,000), retail (26,000) and manufacturing (24,000) with the government shedding 37,000 jobs, marking it the ninth consecutive decline. The official unemployment rate would tell the whole story since it does not count discouraged workers who recently stopped looking for a job. If those people as well as workers who can only find part-time positions are included, the unemployment rate would have been 16.1% in July, down from 16.2% June. With jobs in scarce supply, nearly 200,000 workers dropped out of the labor force in July. The percentage of civilians who have or want a job fell to 63.9% striking the lowest level seen since 1984.
Hourly wages climbed 10 cents or 0.4%, to $23.13. Even though earnings climbed 2.3% over the past 12 months, inflation as measured by the consumer price index (CPI) has risen even faster which means that workers are falling behind and have less cash to spend after paying for necessities such as food, clothing and shelter. The number of jobs created in May and June were revised higher by a combined 56,000. The increase in June was revised to 46,000 from 18,000 and the gain in May was raised to 53,000 from 25,000.
In summary, job creation from coast to coast is desperately needed in order to get the economy back on its feet again. Without more jobs, consumer spending is squashed and the economy shall remain dormant. Investors continue to show their concerns of the economy world-wide. The heavy selling on Wall Street on Thursday was just beginning sign that Wall Street cannot continue climbing higher, until the economy has begun to show more stable signs of improving.
Priceline.com (PCLN) shares climbed 9% higher by mid-afternoon trading after projected higher Q3 profit than Wall Street anticipated.
Bank of America (BAC) shares were lower by 5% into early afternoon trading after the financial-services company, said in a regulatory filing Thursday that it had seen unexpected demand for refunds on loans gone bad - from Fannie Mae and Freddie Mac.
American Science & Engineering (ASEI) shares were down over 14% into mid-afternoon trading after the maker of security systems late Thursday reported Q1 earnings below estimates.
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