“U.S. stocks opened sharply lower Friday as Wall Street digested a weaker-than-expected jobs report,” Evelyn Cheng reports for CNBC. “The Dow Jones industrial average briefly fell more than 250 points in the open, with Goldman Sachs the greatest weight on the index.”
“The Nasdaq composite lost more than 1 percent, with Apple off 1 percent and the iShares Nasdaq Biotechnology ETF (IBB) down more than 2 percent,” Cheng reports. “The S&P 500 fell more than 1 percent to below the psychologically key level of 1,900 with financials leading nine sectors lower and utilities the only advancer. ‘We’re not getting any clarity from this jobs report. More uncertainty. And the uncertainty makes people unwilling to hold anything,’ said JJ Kinahan, chief strategist at TD Ameritrade. ‘This is one more thing that puts the Fed into a tight spot,’ he said.”
“The U.S. economy created 142,000 jobs in September, a number far below the expected 203,000 and could cool expectations that the Federal Reserve will start raising interest rates soon. August and July figures were also revised lower [136,000 new jobs were created in August instead of 173,000; July’s gain was cut to 223,000 from 245,000],” Cheng reports. “Unemployment held at 5.1 percent, according to the Labor Department. The participation rate plunged to 62.4 percent.”
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“Many economists look beyond the ‘main’ unemployment rate to other figures that can give a more textured view of the economy. On jobs day, the Bureau of Labor Statistics puts out a slew of data that show various aspects of the nation’s employment situation,” Nicholas Wells reports for CNBC.
“One of those pieces of data is the U-6 rate. The BLS defines U-6 as “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force,” plus all marginally attached workers,” Wells reports. “In other words, the unemployed, the underemployed and the discourages.”
Jeffry Bartash reports for MarketWatch, “The labor-force participation rate slid to 62.4% from 62.6%, as 350,000 people dropped out of the labor force. That’s the lowest level since October 1977.”
“Among the few bright spots in the September employment report, an alternative measure of unemployment known as the U6 rate fell to 10%,” Bartash reports. “For the first time since the recession ended, the number of people who fall into that group fell below 16 million.”
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“The instant reaction to the jobs report for September could be summed up in one word: ‘ugly,'” Steve Goldstein reports for MarketWatch.
The September report was a complete whiff. It eliminates any hope the Fed will raise rates at its next meeting. But more important it reinforces the ugly reality that this recovery has never gained momentum and likely will not without a change in economic policies. — Douglas Holtz-Eakin, American Action Forum.
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MacDailyNews Take: Oh, goody, more malaise.