Make us your home page
Instagram

Jobless report brings a little good news, fuels market rise

A Pakistani investor sits on the trading floor of Karachi Stock Exchange on Friday. Asian stock markets tumbled Friday amid fears over a slide back into recession in the United States and a worsening debt crisis in Europe.

Associated Press

A Pakistani investor sits on the trading floor of Karachi Stock Exchange on Friday. Asian stock markets tumbled Friday amid fears over a slide back into recession in the United States and a worsening debt crisis in Europe.

WASHINGTON — A better-than-expected employment report from the government Friday eased concerns about an imminent recession, but financial turmoil in Europe continues to roil global markets and remains a threat to the sluggish U.S. economic recovery.

U.S. stock markets proved volatile again Friday, a day after stock prices plunged roughly 5 percent. The Labor Department report that nonfarm payrolls rose by 117,000 jobs in July and the jobless rate ticked down slightly to 9.1 percent sent the Dow Jones industrial average climbing 170 points in the first minutes of trading.

That rise was short-lived as the index went lower, largely on fears of the impact of Europe's financial crisis. But prices then turned higher as a possible solution to the crisis was announced. In the end, the Dow closed up 60.93 points to 11,444.61, an anticlimax to a day that had seen the index fluctuate more than 400 points.

The S&P 500 was down by 0.69 of a point to 1,199.38, and the tech-heavy Nasdaq finished down 23.98 points to 2,532.41.

The market volatility after the jobs report indicated that Europe's debt problems may be weighing more heavily on investors than concerns about the U.S. economy and whether it might be falling back into a recession.

While the Bureau of Labor Statistics' jobs numbers were hardly stellar, they felt great to many after two consecutive dismal jobs reports and a spate of recent weak economic indicators.

Mark Zandi, the chief economist for forecaster Moody's Analytics, said the jobs report "suggests that the economy will skirt recession," though it remained to be seen whether it would offer relief to wary investors.

"The better job number was critical to quell the turmoil in financial markets and shore up flagging confidence," he said.

The brightest spot in the government report was private-sector hiring. It came in at 154,000 jobs in July. But 37,000 lost government jobs, almost all of them at the state and local levels, dragged down the overall hiring number. Health care, retail sales and manufacturing showed healthy hiring during July, respectively adding 31,300, 25,900 and 24,000 jobs. The growth in manufacturing employment was a relief because a key gauge of manufacturing activity released Monday had shown near-recession levels.

The BLS also revised upward its previous estimates for employment in May and June. June had come in at a horrible 18,000 new jobs. That was revised Friday to 46,000. Similarly, May's numbers had been revised down last month to a weak 25,000 new jobs, but on Friday, based on new incoming data, that number was placed at 53,000.

More important were revisions to private-sector hiring, which now is thought to have added 99,000 jobs in May and 80,000 in June. Government layoffs dragged down the jobs reports again for both those months.

Nigel Gault, the chief U.S. economist for forecaster IHS Global Insight, was unimpressed.

"The July jobs report was not as bad as May and June. That's about the best that we can say for it," he said. In a research note, he said the one-tenth of 1 percent dip in the jobless rate was due most likely to a drop in the size of the labor force. The jobs increase, he said, is "still not enough to create a downward trend in the unemployment rate."

There was still plenty of hurt in Friday's jobs report. The BLS reported that the number of people who had been unemployed for less than five weeks fell by 387,000, but that just offset the similar increase during the previous month.

More importantly, the number of long-term unemployed — Americans who have been jobless for 27 weeks or more — was 6.2 million in July, virtually unchanged from the previous month. The long-term unemployed still account for 44.4 percent of all of the jobless.

Headline goes here and here and here

What a difference seven months make. At the start of the year, economists were optimistic that growth would accelerate. Hiring was picking up, boosting incomes and giving consumers more spending power. The government had cut taxes at the end of 2010, putting more money in Americans' wallets. But so far this year, the economy has weakened. It grew at an annual rate of just 0.8 percent in the first six months. Gasoline prices spiked this spring, making it harder for consumers to spend more on other items. Manufacturing supplies were disrupted after Japan's earthquake. Economists are worried the weakness will persist. The faltering economy can be seen in a range of indicators that have deteriorated since the second half of last year:

ECONOMY

(Growth at an annual rate)

3.8 percent: April-June 2010

2.5 percent: July-Sept. 2010

2.3 percent: Oct.-Dec. 2010

0.4 percent: Jan.-March 2011

1.3 percent: April-June 2011

CONSUMER SPENDING

(Growth, annual rate)

2.6 percent: July-Sept. 2010

3.6 percent: Oct.-Dec. 2010

2.1 percent: Jan.-March 2011

0.1 percent: April-June 2011

AFTER-TAX

PERSONAL INCOME

(Growth, annual rate)

2.3 percent: July-Sept. 2010

1.5 percent: Oct.-Dec. 2010

0.7 percent: Jan.-March 2011

0.7 percent: April-June 2011

HOME SALES

(Sales of previously occupied homes)

4.9 million: 2008

5.2 million: 2009

4.9 million: 2010

4.8 million: Sales, annual pace, June 2011

Associated Press

Jobless report brings a little good news, fuels market rise 08/05/11 [Last modified: Friday, August 5, 2011 11:17pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. At Menorah Manor, planning paid off during Irma

    Nursing Homes

    ST. PETERSBURG — Doris Rosenblatt and her husband, Frank, have lived in Florida all of their lives, so they know about hurricanes.

    Raisa Collins, 9, far left, works on a craft project as Certified Nursing Assistant Shuntal Anthony holds Cassidy Merrill, 1, while pouring glue for Quanniyah Brownlee, 9, right, at Menorah Manor in St. Petersburg on Sept. 15. To help keep its patients safe during Hurricane Irma, Menorah Manor allowed employees to shelter their families and pets at the nursing home and also offered daycare through the week. The facility was able to accommodate and feed everyone who weathered the storm there. [LARA CERRI   |   Times]
  2. After Irma, nursing homes scramble to meet a hard deadline

    State Roundup

    TALLAHASSEE — Florida's nursing homes and assisted-living facilities find themselves in an unfamiliar place this week — pushing back against Gov. Rick Scott's administration over new rules that require them to purchase generator capacity by Nov. 15 to keep their residents safe and comfortable in a power …

    In this Sept. 13 photo, a woman is transported from The Rehabilitation Center at Hollywood Hills as patients are evacuated after a loss of air conditioning due to Hurricane Irma in Hollywood. Nine have died and patients had to be moved out of the facility, many of them on stretchers or in wheelchairs. Authorities have launched a criminal investigation to figure out what went wrong and who, if anyone, was to blame. [Amy Beth Bennett | South Florida Sun-Sentinel via AP]
  3. Trigaux: How Moffitt Cancer's M2Gen startup won $75 million from Hearst

    Business

    TAMPA — A Moffitt Cancer Center spin-off that's building a massive genetic data base of individual patient cancer information just caught the attention of a deep-pocketed health care investor.

    Richard P. Malloch is the president of Hearst Business Media, which is announcing a $75 million investment in M2Gen, the for-profit cancer informatics unit spun off by Tampa's Moffitt Cancer Center. Malloch's job is to find innovative investments for the Hearst family fortune. A substantial amount has been invested in health care, financial and the transportation and logistics industries.
  4. Three-hour police standoff ends, thanks to a cigarette

    News

    TAMPA — A man threatening to harm himself was arrested by Tampa police on Tuesday after a three-hour standoff.

  5. Another Hollywood nursing home resident dies. It's the 9th in post-Irma tragedy.

    State Roundup

    The Broward County Medical Examiner's office is investigating another death of a resident of the Rehabilitation Center at Hollywood Hills — the ninth blamed on the failure of a cooling system that became a stifling deathtrap three days after Irma hit.

    Carlos Canal, pictured at 47 years old, came to Miami from Cuba in 1960. Above is his citizenship photo. [Courtesy of Lily Schwartz]