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Pre-Market Primer: US Adds 157,000 Jobs in January


The consensus estimate nailed it this time.

The US added 157,000 jobs in January, meeting economists' estimates. The unemployment rate was essentially unchanged, but rounded up to 7.9%.

The participation rate was also unchanged at 63.6%. In January, retail jobs rose by 33,000, construction by 28,000, and health care rose by 23,000. It should be noted that the Bureau of Labor Services updates its population estimates in January, and does not revise the December numbers to reflect that.

Index futures were higher ahead of the reprot. Dow (INDEXDJX:.DJI) futures were up 0.51% at 13,865. Futures contracts on the S&P 500 (INDEXSP:.INX) rose 0.41% to 1,499.50 and Nasdaq (INDEXNASDAQ:.IXIC) futures rose 0.55% to 2,740.00.

More US economic data comes out this morning. The ISM manufacturing index for January is slated to show a steady expansion at 50.7. PMI manufacturing is also expected to show growth at 55.5, up from 54.0 in December. The Reuters/University of Michigan consumer sentiment, index is expected to show a rise to 71.5 from 71.3. Construction spending probably rose 0.8% in December after falling 0.3% in November.

Exxon Mobil (NYSE:XOM) booked $2.20 per share in profit on revenue of $115.17 billion, beating earnings expectations by $0.21.

Private equity firms might announce a takeover of Dell (NASDAQ:DELL) next week. The New York Post says that the deal will be worth between $15 and $16 per share.

Today, the major automakers will report January sales. Total domestic sales is likely to have stayed steady at 12 million and total vehicle sales might have fallen by 100,000 to 15.3 million units.

China's official PMI showed slowed growth in January, shrinking to 50.4 from 50.6. A private manufacturing purchasing manager's index, compiled by HSBC and Markit rose to 52.3 from 51.5 last month. (Readings over 50 signal expansion of the sector.) The official gauge is weighted more toward large state-owned enterprises whereas the private PMI surveys more small and medium businesses.

"We see increasing signals of a sustained growth recovery in the coming months: the steady investment growth led by infrastructure projects, the improving labor market conditions boosting consumer spending, and the ongoing re-stocking process to lift production growth," says Hongbin Qu, Chief China Economist and co-Head of Asian Economic Research at HSBC.

Eurozone PMI for January showed the manufacturing sector contract at a slower pace, rising to 47.9 from 46.1. Inflation in the region fell to 2.0% in January from 2.2% in December, meeting the European Central Bank's consumer price target. The unemployment rate in the area ticked down to 11.7% in December from 11.8%.

Japan's unemployment rate rose a tenth of a percentage point to 4.2% in December while household spending declined by 0.7%.

The Netherlands nationalized SNS Reaal (AMS:SR), a major bank. The bailout cost the country 3.7 billion euros after a private takeover failed. The bank, the fourth largest in the country, suffered huge deposit outflows.

Twitter: @vincent_trivett
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