The stock market approved of the numbers released in the Labor Department’s latest jobs report. The acceptance of employees into the midst of companies has been occurring frequently, so much so the economy at large has not seen such a gain of individuals getting up early and going to work and working all day and then going home since the last recession started. In the past, when joblessness is high stocks are too, so the inverse at the moment may seem kind of perverse. Article resource – Rising stocks behave out of character with positive jobs report by MoneyBlogNewz.
Careers and stocks in first quarter go up
The Labor Department reports a drop from February's 9.8 percent joblessness rate to 8.8 percent in March in the U.S. This is the lowest rate in two years. Stocks started to go up due to this. A new high for the Dow Jones Industrial Average happened with a rise of 87 points to 12,406. The 0.7 percent increase means a new 2011 high. There was a rise in the Standard & Poor's 500 as well. It went up 0.8 percent, 10 points, to 1,335. There was a 15 point raise, 0.6 percent, in the Nasdaq composite to 2,796. In February, there was a 194,000 increase in the number of workers on payrolls in the U.S. In March it went up another 216,000. The joblessness rate has been dropping since it was 9.8 percent Nov, the biggest four-month decrease since 1983. In the three months that ended with March, there was the first biggest first-quarter gain with a 5.4 percent increase since 1998 in the U.S.
market and labor relationship
Normally corporations announcing layoffs benefit on Wall Street because investors believe smaller payrolls equal higher profits. When the labor market was hemorrhaging jobs in Jan 2009, the stock market gained. In fact, in the past 60 years the stock market has performed better on average when the United States unemployment rate was higher rather than lower. Each year the joblessness rate was over 6 percent, there were huge increases in the S&P 500, states Ned Davis Research. It would go up 13.5 percent. Joblessness beneath 4.3 percent would mean a smaller increase. On average, the S&P 500 increase would be 2.1 percent. In January 2009 Ed Clissold of Ned Davis Research told MarketWatch that in addition to lower costs and higher profits, traders salivate at high unemployment because it means they will benefit from economic stimulus provided by the federal government. Most traders are able to make a profit quite very easily too. This is because stock costs are im! pacted by unemployment before the information gets out, so traders can do a flip to make money.
All of the traders do not want careers to get better like this
Friday's good labor market news helped stocks increase. More than likely this was because there was not too large of a stock decrease. Strategy for the long term is uncommon among traders. They are more interested in short term gains. Traders think that the Federal Reserve bond purchasing program, QE2, has helped the stock market. There are many traders with fixed-incomes that are worried about the labor markets. They worry that in June the Fed won’t purchase bonds anymore as the QE2 program will end. The good stock might not be great for everyone not involved in Wall Street which has been shown as Americans struggle and Wall Street bonuses increase. If more Americans keep finding work, the markets could change their tune.
Citations
Associated Press
finance.yahoo.com/news/Stocks-rise-after-apf-653435655.html?x=0&sec=topStories&pos=1&asset=&ccode=
Market Watch
marketwatch.com/story/bad-news-on-job-front-doesnt-have-to-be-bad-for-stocks
CNN Money
money.cnn.com/2011/03/31/news/economy/thebuzz/index.htm
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