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by Tom Huddleston, Jr. @tjhuddle JULY 31, 2014, 2:02 PM EDT
Leading market indexes lose all their gains for the month of July.
Geopolitical worries weighed on investors Thursday, driving the Dow Jones industrial average down more than 300 points, leading a market retreat that left the blue-chip index down for the entire month of July.
In addition to the Dow’s sharp drop, the S&P 500 index and the Nasdaq both fell 2% in afternoon trading. Both the Dow and the S&P 500 finished July down slightly, erasing all gains from a month that saw the Dow cross the 17,000-point mark for the first time ever and hit multiple record highs.
The Chicago Board Options Exchange Volatility Index (VIX), known as the “fear index,” rose some 27%, hitting a multi-month high.
Contributing to the market’s retreat: news late Wednesday that Argentina’s credit rating has been downgraded to selective default by Standard & Poor’s. The country’s second default in 13 years sent its Merval stock index plummeting Thursday afternoon.
There are also lingering questions over how the latest round of sanctions on Russia issued by the U.S. and Europe will affect the global economy, including the energy markets. Exxon Mobil XOM -4.17% , which has a multi-billion dollar partnership with Russian company Rosneft, saw its stock drop 4% on Thursday.
more here:
http://fortune.com/2014/07/31/stock-markets-down-july-close/
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7/31/2014 @ 8:37AM
The U.S. Jobs Report: American Jobs May Finally Be On The Rebound
Jeff DeAngelis , Northwestern Mutual
Jeff DeAngelis is the chief investment officer of Northwestern Mutual Wealth Management Company.
It’s the kind of economic news many have been looking for: The monthly jobs report from the U.S. Bureau of Labor Statistics showed that the U.S. economy added 288,000 nonfarm jobs in June. It was the fifth straight month of gains above 200,000—a run unmatched since the period of September 1999 to January 2000. At the same time, the unemployment rate fell to 6.1 percent, the lowest level since September 2008.
Job creation was widespread across sectors, and there were few signs of inflationary pressures, suggesting that the economy is transitioning to a faster pace of growth. This helped to lift the stock market to new highs. In early July, the Dow Jones Industrial Average closed above the 17,000 threshold for the first time. The Standard & Poor’s 500 Stock Index also recorded a new high, as did the tech-heavy Nasdaq, which had its best outing since the go-go days of 2000.
No One Is Arguing That All Is Well, However
While the number of people out of work for more than six months has slowly chipped downward, long-term unemployment remains high. In addition, the number of Americans employed part time for economic reasons, either because their hours had been cut back or because they were unable to find full-time work, increased by 275,000 in June to 7.5 million. This may be better than prolonged joblessness, but it’s not a path to sufficiency, let alone prosperity.
Meanwhile, wages—another key benchmark of labor-market health—haven’t increased significantly for most workers. Over the past 12 months, average hourly earnings for all employees rose by just 2 percent, aligning closely with consumer-price inflation but doing little to aid economic growth. These slow-to-grow wages suggest that employers don’t yet feel compelled to raise wages—or to scale back their required qualifications—in order to attract workers.
For the First Time in a Long Time, Many Believe This Could Finally Change.
June’s job gains were not just in well-paid white-collar professions; most were in the middle tier of jobs that enable workers to gain a foothold in the middle class. For example, manufacturing companies hired 16,000 workers in June, with all of the increase in durable goods manufacturing; transportation companies added 17,000 employees, up from an average of 11,000 jobs per month over the prior 12 months; and health care employment increased by 21,000. The increases have helped boost Americans’ optimism in their job prospects going forward.
Gallup, for example, found recently that 35 percent of Americans say now is a good time to find a quality job, up 7 percentage points from last month. In fact, this is the most optimistic Americans have been about the job market since the starting point of the Great Recession. Equally significant is that job optimism has increased among all major demographic groups Gallup tracks. In July, young Americans, wealthier Americans, democrats and those with advanced degrees were the most optimistic about finding a job. Even so, the greatest gains in Gallup’s recent poll were seen in how lower-earning, less educated workers see their job prospects.
Better Times Ahead?
While the 35 percent now calling it a good time to find a quality job may not seem very high, Americans’ improving view of the job market is one more sign that better times may lie ahead. If the economy continues to add jobs at the current pace, many economists believe we can reach pre-recession employment levels in the not-so-distant future. And with more Americans back in the workforce, this could be the catalyst that finally pushes wages higher. In the end, that’ll be good news for all of us because real wage growth is the basis for economic growth.
more here:
http://www.forbes.com/sites/northwesternmutual/2014/07/31/the-u-s-jobs-report-american-jobs-may-finally-be-on-the-rebound/
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Early July Jobs Numbers:
US COMPANIES ADD FEWER JOBS THAN EXPECTED
SAM RO
JUL. 30, 2014, 8:15 AM
U.S. companies added just 218,000 new private jobs in July, says ADP.
This was a bit lighter than the 230,000 expected by economists.
This is down from the 281,000 added in June.
"The July employment gain was softer than June, but remains consistent with a steadily improving job market," said Moody's Analytics' Mark Zandi. "At the current pace of job growth unemployment will quickly decline. Layoffs are still receding and hiring and job openings are picking up. If current trends continue, the economy will return to full employment by late 2016.”
Good producing companies added 16,000 jobs while services providers added 202,000.
Small businesses (1-49 employees) were responsible for 84,000 of those jobs.
Despite the miss, Wall Street remains optimistic.
"We’re not too concerned that July’s rise in the ADP was smaller than June’s 281,000 increase," said Capital Economics' Paul Dales. "Changes in employment always bounce around from one month to the next. The main point is that job growth improved in the first half of the year and appears to have remained strong going into the second half."
"In the context of the strength in employment growth since the start of the year, this report points to further payrolls gains of 215K to 235K in July, which will mark the 6th consecutive months of jobs growth in excess of 200K," said TD Securities' Millan Mulraine. "This will be further confirmation of the sustained pick-up in the labor market, and it will provide further confidence to the Fed in the sustainability of the economic recovery."
The BLS's official July jobs report comes out at 8:30 a.m. ET on Friday. Economists are looking for 231,000 new nonfarm payrolls driven by 230,000 private payrolls.
here:
http://www.businessinsider.com/adp-employment-report-2014-7
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10:26 am ET | Jul 31, 2014
What to Watch for in Friday’s July Jobs Report
By BEN LEUBSDORF
The first half of 2014 saw the U.S. economy’s strongest stretch of hiring since early 2006. The jobless rate fell to 6.1% in June from 7.5% a year earlier, its fastest one-year decline since October 1984, and nonfarm employers added a seasonally adjusted 288,000 jobs.
Can hiring keep up its strong pace in the second half of the year? We’ll get our first clue Friday at 8:30 a.m. EDT, when the Labor Department releases its jobs report for July. Economists surveyed by The Wall Street Journal expect payrolls to rise by 230,000 and the unemployment rate to remain at 6.1%.
Where’s The Hiring?
Output Versus Jobs
In, Out and on the Fence
Where’s Wage Growth?
The Fed is Watching
The Fed, in its policy statement Wednesday, acknowledged that the labor market is improving though it also noted that “a range of labor market indicators suggests that there remains significant underutilization of labor resources.” Fed officials will closely examine Friday’s jobs reports for signs of a tightening labor market – a rise in wage growth, a broad drop in unemployment – or signs of continued slack, such as a persistently low labor force participation rate. Either, or both, would feed into the Fed’s ongoing debate about when to begin raising interest rates, which have been pinned near zero since December 2008.
details, here:
http://blogs.wsj.com/economics/2014/07/31/what-to-watch-for-in-fridays-july-jobs-report/
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