Stocks Fall On Weak Employment Growth Data
Kurt Brouwer January 4th, 2008
Another rough day for Wall Street as the article indicates [emphasis added below]:
Economic Anxiety Roils Stocks (Wall Street Journal, January 4, 2008, Peter Mackay)
Stocks slid in the wake of starkly disappointing December jobs data that renewed concerns about whether the flagging U.S. economy can avoid a worst-case outcome in the months ahead.
In late morning trading, the Dow Jones Industrial Average was off 204.19 points, or 1.6%, at 12852.53, hobbled by a Labor Department report showing that nonfarm payrolls rose by just 18,000 workers in December, the job market’s worst performance in more than four years.
The report undermined the hopes of investors large and small that the U.S. economy can stave off a dangerous chain reaction. If employment continues to suffer in the months ahead, analysts say that could cut into consumption, which represents more than two-thirds of gross domestic product — essentially, the economy’s bottom line.
“After this report, I’d have to say the chances of recession are about 50-50,” said economist David Wyss, of Standard & Poor’s in New York.
Today’s employment report was the weakest since August 2003, when the economy suffered a monthly decline of 42,000 jobs.
Last month’s jobs tally was down from November’s 115,000 gain, which was revised up from an initial estimate of a 94,000 increase. The unemployment rate rose to 5.0%, the highest level since November 2005, from 4.7% the previous month.
The Standard & Poor’s 500-stock index fell 27.13 points, or 1.9%, to 1420.03. The Nasdaq Composite Index was down 78.19 points, or 3%, to 2524.49…’
Not a good number for job growth. I suspect it will get revised upward as did last month’s number.
Update: The downturn accelerated as the day progressed, so the closing numbers were worse than those above, which was posted early in the day. For the day, the Dow Jones Industrials fell 1.96%, the S&P 500 fell 2.46% and NASDAQ absolutely plunged by 3.77%. Yikes.
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