Stocks Close Lower on Weaker-Than-Expected Jobs Data

Investors who spent the week bidding stocks higher reversed course Friday after the latest labor statistic

Despite Friday's losses, the Dow industrials rose 0.9% for the week, its fifth-consecutive weekly gain, and the Nasdaq gained 2.6%.

Nonfarm payrolls dropped 93,000 last month, the steepest in five months, after falling a revised 49,000 in July, the Labor Department said early Friday. The unemployment rate edged down to 6.1%. Economists had predicted an increase of 12,000 in nonfarm payrolls and expected the unemployment rate to remain unchanged at 6.2%.

"The jobs report is just awful," said Bill Cheney, chief economist for John Hancock Financial Services in Boston. "I still lean toward believing that spending by consumers, government and businesses adds up to enough to generate a self-sustaining cycle of income gains and job creation. But it's definitely cause for concern about the outlook."

Strong productivity has allowed companies to increase output without increasing workers.

The latest report did offer some glimmers of hope. There was a slight increase in temporary hiring last month, a possible precursor to companies bringing on more full-time employees. Some economists remain confident the accelerating economy will soon leave employers little choice but to start hiring when improved productivity alone isn't enough to meet demand.

Among stocks to watch Friday, Intel finished flat after the company late Thursday raised its third-quarter sales forecast. The chip maker now expects revenue between $7.6 billion and $7.8 billion, in the upper range of its Aug. 22 forecast of $7.3 billion to $7.8 billion.

Wal-Mart shed 2% after Banc of America Securities analyst Aram Rubinson cut his investment opinion on the company's stock to "neutral" from "buy," saying comparable-store sales are "unlikely to see any further acceleration" after reaching 6.9% in August.

Verizon Communications late Thursday struck a deal with two unions representing some 79,000 of its employees after weeks of negotiations. Its shares moved down almost 1%.

Stocks declined. On the Big Board, where 1.45 billion shares traded, 1,785 stocks fell and 1,463 rose. On the Nasdaq, where about 1.95 billion shares changed hands, 1,780 stocks declined and 1,409 advanced.

Bonds gained. The 10-year Treasury note rose 1 1/4 points, or $12.50 for each $1,000 invested. The yield, which moves inversely to price, fell to 4.349%. The 30-year bond was up about 1 7/8 points to yield 5.185%.

The dollar was mixed. It traded at 116.88 yen, up from 116.74 yen late Thursday in New York, while the euro rose to $1.1106 from $1.0941.

"The big difference is we weren't shipping entire professional, white collar departments and divisions to 3rd world countries during, before or after that recession"

You have a point there, but we are LOSING those jobs not just because of the cost of American labor, it's all the hoops companies have to jump through to employ a labor force here. Between all the OSHA requirements, frivelous law suits for things like fat in McDonalds Hamburgers, Law suits over workplace ergonomics, racial quota's, insurance policies needed for everything from the "Family Leave Act" to disgruntled employees killing the hired help, and not but not least..... Terrorism insurance on the building used to house these workers.

It's no wonder nobody wants to hire American labor. The Lawyers and Labor Unions have done this to us, not this President

Of course job losses continue to be high, we are in a serious recession for Christ sake. The only one who dosen't seem to be aware of it is George Bush. Bush is in denial, just like his father, about the seriousness of this recession.

I guest you just have to buy a book or something. Read the facts before you b--tch complete falsehoods. Are you really a conservative? Bush Sr. no good, the present President as well. They are all in denial, while surrounded by large staff. You, on the other hand, who does not seem even to know what recession is, see the truth. My, I am really impressed.

Title: Unemployment Drops Slightly, but Payrolls Cut Again
Source: Fox News
URL Source: http://www.foxnews.com
Published: Sep 5, 2003
Author: Fox News
Post Date: 2003-09-05 10:29:14 by Badeye
5 Comments

Unemployment Drops Slightly, but Payrolls Cut Again

Friday , September 05, 2003

WASHINGTON — The civilian unemployment rate improved marginally last month — sliding down to 6.1 percent — as companies slashed payrolls by 93,000. Friday's report sent mixed signals about the nation's overall economic health.

August was the seventh consecutive month of cuts in payrolls, a survey released by the Labor Department (search) showed, indicating continuing weakness in the job market. But the overall seasonally adjusted unemployment rate fell from 6.2 to 6.1 percent of the labor force, as reflected by a broader survey of U.S. households.

Last month's power blackout in the Northeast and Midwest caused significant disruptions in the economy, but Labor Department analysts say it was unlikely to have affected either of the monthly surveys.

The survey of businesses showed that job cuts were heavy again in manufacturing, a sector that has suffered the brunt of the economic downturn that began in March 2001.

President Bush on Monday announced he was creating a new assistant secretary of Commerce position to focus on revitalizing that part of the economy.

Hiring in health care and construction helped offset losses in factories and other industries, such as information, professional and business services and government, Friday's report said.

Labor Department analysts believe the survey of businesses provides a more reliable picture of the jobs market than the household survey.

The payroll report is based on a larger sample and estimates "are regularly anchored to" counts derived from employment insurance tax records, said Kathleen P. Utgoff, Bureau of Labor Statistics (search) commissioner.

Last month, the number of people in the labor force remained largely unchanged, with just 10,000 giving up their job searches. The labor force is comprised of those working and looking for work.

Nearly 2 million people in August were unemployed for 27 weeks or more, representing nearly 22 percent of all jobless workers. Those figures were similar the July numbers.

Recent data indicate an improving economy, yet favorable conditions have yet to trickle down to the jobs market. Businesses still are cautious about hiring and adding new positions, the major factor holding back the economy.

That could spell problems for Bush's re-election next year, with polls showing the economy as the top concern for likely voters, replacing terrorism and Iraq.

With other parts of the economy on the mend, economists believe the Federal Reserve (search) will hold a key short-term interest rate steady at a 45-year low of 1 percent when it meets on Sept. 16. If the job market doesn't turn around, however, analysts don't rule out a Fed rate reduction down the road.

Remember when the high income earning (white-collar) workers are out of a job everyone else foots the tax bill.

What on earth does that mean?

Those fellows unloading ships on the West coast -- yes, those that were recently on strike --- make $130,000 per annum. That's a white collar job?

You do indeed seem to have this particularly elevated esteem for white-collar workers. There importance in the economy is no more and no less great than of any other person.

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