Poor Employment Data Leads to Mixed Stock Open Friday
The Department of Labor released the February employment data today, showing a loss of 63,000 jobs according to the non-farm payroll data. The heavy losses we concentrated in the construction, manufacturing and retail industries. The rate is troubling for investors, as this is the deepest plummet in non-farm payroll for several years.
Manufacturing lost 52,000 jobs, construction lost 39,000 jobs, and retail lost 34,000 jobs. Altogether, that amounts to 125,000 jobs. Thankfully, there is some job growth in other areas, otherwise, this would be a record loss. Many of these losses are directly related to the struggling housing market.
The overall unemployment rate remained at 4.8% despite the significant loss in payroll data. Jobs are
continuing to open up in the food service and health care industries. Healthcare grew by 36,000 in February, while food services acquired about 12,000 jobs.
The Labor force recorded some losses as well. The report from the Dept of Labor stated, “Both the civilian labor force, at 153.4 million, and the labor force participation rate, at 65.9 percent, declined in February. Total employment (146.0 million) and the employment-population ratio (62.7 percent) were little changed over the month.”
Average weekly earnings increased, yet this rise is no match for recent inflation data. Average pay rose by a modest 0.3%, which is a 5-cent increase per hour. Over the past year, average earnings have increased a total of 3.7%.
By noon today the Dow Jones slipped by 57.80, and the S&P 500 dropped 3.39 points. The Nasdaq Composite Index gained 3.42 points. You can check real time updates on the Fox Business website.
Traders were anticipating positive data from today’s employment report. The significance of such a heavy loss in jobs is the fact that something like this points to recession. Employment data thus far has not supported convincing enough negativity to add to the already heightened recession worries of Wall Street. Since this is the highest loss in the labor reports for five years, things are looking just as bad if not worse.
