An encouraging U.S. jobs report was not enough to give the markets a lift on Friday as worries about Greece’s debt crisis continued to weigh on sentiment.
The number of U.S. jobs rose by 80,000 in October while the unemployment rate was little changed at 9% versus 9.1% in September, the U.S. Bureau of Labor Statistics reported Friday. Economists had expected an increase of 95,000 jobs, and the consensus was for an unchanged unemployment rate.
In a bright spot of news, figures for August and September were revised to show 102,000 more jobs than reported earlier. The BLS revised its September jobs number higher to 158,000 from 103,000, as well as the number of new jobs in August to 104,000 from 57,000. However, the country’s number of unemployed persons, 13.9 million, changed little, the bureau said in its employment situation release.
“Today’s report shows that the labor market is healing, but only slowly, leaving the economic recovery on a sluggish trajectory,” wrote the North America economics group at Bank of America Merrill Lynch Global Research.
The revised figures were not enough to counter investors’ worries about a Friday confidence vote for Greek Prime Minister George Papandreou. Even though a proposed popular vote in Greece over the European debt deal was abandoned on Thursday, uncertainty remains about the future of Greece’s debt deal with the eurozone.
Stocks were lower in early afternoon trading, with the Dow Jones industrial average down 141 points, 1.3% lower, at 11,903. The S&P 500 was down 15 points, 1.2% lower, at 1,246. The Nasdaq index was down 324 points, 0.89% lower, at 2,673.
Still, the October jobs report was a relatively positive note for the U.S. economy, said Anthony Karydakis, adjunct professor of economics at the Stern School of Business of New York University and senior economist at Commerzbank, in an analyst vote.
“The key message from today’s employment data is that labor markets remain in appreciably better shape than it had appeared in the previous couple of months,” Karydakis said. “Not only did private payrolls, still the better gauge of demand for labor in the economy, rise by 104,000 in October, but the prior two months were revised sharply higher by a total of 84,000 (the upward revision to headline payrolls was 102,000). The bottom line is that the pace of hiring in recent months has not suffered nearly as much as had initially appeared based on the preliminary data for the summer months.”
Looking more closely at the October jobs figures, Karydakis noted that manufacturing turned out a small gain, with 5,000 new jobs, while retail trade, education/health care, and leisure/hospitality all posted solid gains. State and local governments continued to shed jobs, down 26,000, at pace similar to the one that has prevailed all year.
“All in all, the report confirms the premise that the economic recovery has enough momentum to continue forward at a moderate to relatively respectable pace of 2.5% to 3.0% and shows no signs of fizzling,” Karydakis said. “The main risk ahead to the recovery remains the possibility of exogenous shock waves stemming from the eurozone debt crisis, an outcome impossible to handicap sensibly at this point.”
Read about last month’s U.S. jobs report at AdvisorOne.com