The effects of the government shutdown on hiring were greatly exaggerated, according to the monthly non-farm payrolls report.
Despite the poor sentiment from 17 days of public sector and government contractor furloughs, the US added 204,000 jobs to the payrolls in October. The unemployment rate held steady at 7.3%.
This blew past bearish forecasts. Economists predicted just 120,000 new hires last month. Government shed 8,000, but the only other sector to tighten was wholesale trade, which declined by 5,400 heads. Leisure and hospitality jobs increased the most at 53,000. Retail and finance were tied for second place with 44,000 jobs added.
August’s data was revised upward to 238,000 from 193,000 and September was revised up to 163,000 to 148,000.
Stock indices dropped sharply yesterday, erasing early gains on better-than-expected US GDP and an interest rate cut in Europe. Futures were mixed this morning before the jobs report came out. Dow
(INDEXDJX:.DJI) futures were down 0.06% at 15,558.00 while futures on the S&P 500
(INDEXSP:.INX) rose 0.09% to 1,746.80. Nasdaq
(INDEXNASDAQ:.IXIC) futures climbed 0.14% to 3,324.25.
Still to come today is the Reuters/University of Michigan consumer sentiment index, which is slated to rise to 75 from 73.2 for this month’s initial reading. Federal Reserve Chairman Ben Bernanke, San Francisco Fed President John Williams, and the Atlanta Fed’s Dennis Lockhart will also deliver speeches today.
European stocks also declined today as Standard & Poor’s cut France’s credit rating to AA from AA+ due to poor prospects for the country’s economic growth. S&P’s analysts “believe lower economic growth is constraining the government's ability to consolidate public finance.” The ratings agency’s outlook for France is stable. Today, France reported that industrial production is down 0.9% year-over-year.
German exports rose 1.7% in October, surpassing forecasts of a 0.4% rise. On a yearly basis, exports are up 3.6%. Imports fell 1.9% from September to October, however. Germany’s trade surplus rose 19% to a record high of 18.8 billion euros.
China’s trade surplus unexpectedly doubled in October to $31.1 billion. On a yearly basis, exports were up 5.6% and imports rose 7.4%. Both figures greatly exceeded forecasts. This weekend, China’s leadership will discuss comprehensive reforms that might free farmers from constraints, liberalize interest and exchange rates, and hand more power to the private sector. China-watchers say that this week’s reforms could be the biggest policy change since Deng Xiaoping introduced export-oriented capitalism decades ago.
In corporate news, Twitter
(NYSE:TWTR) shares have pulled back this morning after a 73% pop at yesterday’s IPO. Shares were off 2.5% this morning.
Shares of the Walt Disney Company
(NYSE:DIS) were down 1.3% despite the company’s better-than-expected earnings report. Earnings in the fiscal fourth quarter rose to $0.77 per share from $0.68 per share a year earlier. Revenue rose 7.7% to $11.6 billion.
The data breach at Adobe
(NASDAQ:ADBE) was worse than initially reported. The security firm LastPass said that it found that hackers have data belonging to 152 million Adobe accounts. This is more than three times the number of affected accounts that Adobe initially disclosed.
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