U.S. markets near flat after jobs data; gold posts first weekly loss in four
NEW YORK (Aug 20) U.S. stocks were mostly unchanged Friday afternoon, paring earlier losses and seemingly shrugging off weaker-than-expected jobs growth in July, a month that also saw the unemployment rate fall to a four and a half year low.
Sitting near the record highs reached in the previous session, as of late afternoon, the Dow was down just 10 points at 15,618, trimming an earlier 69 point drop, while the Nasdaq was up 5 points at 3,681 and the S&P 500 lost 1 point to 1,706.
Though the jobs data seemed to have a muted effect on stocks, treasurys rallied after the report, sending the yield on the benchmark 10-year note down 9 basis points to 2.621%. Investors assessed the data for indications on when the Fed would start tapering its monetary stimulus, with varying views.
This afternoon, St. Louis Fed President James Bullard said more data is needed before tapering can begin, with some data still suggesting a weak labor market.
The Labor Department reported Friday that total nonfarm payroll employment increased by a weaker-than-expected 162,000 in July, and the unemployment rate edged down to 7.4%, from 7.6 % in June. According to Bloomberg, consensus expectations were for jobs growth of 175,000 in July, with estimates going as high as 203,000, while economists also expected the unemployment rate to fall to 7.5%.
The agency also said that June jobs growth was revised downward from 195,000 to 188,000, while the change in total nonfarm payroll employment for May was revised from 195,000 to 176,000. With these revisions, employment gains in May and June combined were 26,000 less than previously reported. Over the prior 12 months, nonfarm employment growth has averaged 189,000 per month.
The data followed weekly jobless claims dropping to a five and a half year low on Thursday, and better than expected private sector ADP payrolls growth on Wednesday, which sent stocks in the previous session popping, along with an upbeat ISM manufacturing survey. The jobs numbers released Friday are no doubt being analyzed for what they will mean to the Fed's stimulus program, with investors encouraged by the latest policy-setting meeting earlier this week, which supported the view that the Fed would continue its bond buying program for now.
On Thursday, both the Dow and the S&P 500 closed in record territory, with the S&P 500 rising above 1,700 for the first time ever. All three indices are still looking at scoring weekly gains.
Also on the economic calendar this morning, it was reported that consumer spending rose 0.5% in June, compared to 0.2% growth in May, and to consensus expectations for a 0.4% rise. Personal income rose 0.3% in June versus a slightly downward revised 0.4% the month before, coming in just below consensus estimates for 0.4% growth.
