Unemployment drop is good for investors

Forget the conspiracy theories about rigged data. The latest jobs numbers are bullish for retailers and consumer products companies.

By Jonathan Berr Oct 5, 2012 11:46AM
Unemployment fell to 7.8% in September, its lowest level since President Barack Obama took office, prompting accusations that the incumbent administration rigged the data to bolster its chances for re-election. 

Investors should ignore the ludicrous claims and focus on the buying opportunities presented by an improving economy while keeping in mind that the gains may not be sustainable.
Scott Hoyt, a senior director of consumer economics for Moody's Analytics, tells MSN Money that the data, which showed a gain of 114,000 in nonfarm payrolls, indicated some "data anomalies," such as a big increase in the number of part-time workers who say they want to work full time. Government jobs also showed gains, reversing recent declines.

"We were surprised by the drop in the unemployment rate," he said, adding that claims of political manipulation of economic data are not new. "You hear that every so often. . . . We have never given any credence to those claims." 

Image, Resume copyright Dynamic Graphics, age fotostock, age fotostockIf the jobless improvements hold, the holiday season may turn out to be better than retailers had expected. That is good news for a variety of companies -- including Wal-Mart (WMT), Sears Holdings (SHLD) and TJX (TJX) -- that appeal to lower- and middle-income consumers. It also includes those like Macy's (M) and Nordstrom (JWN) that appeal to wealthier shoppers. Surging consumer confidence, coupled with a rebound in real estate, will also bolster a wide array of companies, including Procter & Gamble (PG), Costco (COST)  and Home Depot (HD), along with companies that cater to the wealthy, such as Tiffany & Co. (TIF). 

Of course, these improvements could evaporate if Congress fails to stop the nation from tumbling off the fiscal cliff, if the situation in Europe deteriorates significantly or if China's economy overheats. Though a lower unemployment rate no doubt helps Obama's re-election chances, conspiracy theories about rigged data make no sense.

For such a diabolical plan to work, it would have to be hatched at the highest levels of government and  would have to involve multiple sets of data, because the cooking of one month's report would be too easy to spot. Though other countries, including Greece and China, have been accused of fudging their data, there is no evidence that this has happened in the U.S.

Jonathan Berr is long Wal-Mart. Follow him on Twitter@jdberr.

203Comments
Oct 6, 2012 4:49PM
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you are one huge group morons/nuts
Oct 6, 2012 8:15AM
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@Someone- I have not seen gas shortages since Jimmy Carter I guess you dont live in California.

Oct 5, 2012 5:25PM
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Well we know for sure that SEIU employed the loudest, most obnoxious, racist Obama supporters at $11 an hr. to harass Romney supporters.

 

And they say Obama can't create jobs......

 

I wonder how much they pay per vote?  I need more than a free phone, bus ride, and sandwich to vote for this empty chair!

Oct 5, 2012 5:21PM
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Hmmm we NEED 200,000 jobs created per month just to keep up with population growth, yet 114,000 drops the unemployment rate .3%?????????

 

LMFAO!  And these are the MORONS we are to trust our retirement funds with?  Johnny here better hope Obama wins, otherwise this loon and his rhetoric will be serving fries at the local McDonalds!  He damn sure won't be running the register with his ignorant math skills!

 

Oct 5, 2012 5:17PM
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Oh yah, the bulls are just going crazy today...Dow up 34.  Wow.  Nasdaq and S & P down.   Bullish fest!

The jobs gains of 114,000 don't = a .3% drop in unemployment, about 400,000 jobs added would, but.....anyway, it's a gain.

Still have less jobs that we did in January 2009, and especially January 2008.

Jan 08 we had 138 million jobs in the US.  Today we're at over 133 million only.

Oct 5, 2012 5:15PM
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Obama gets his **** handed to him in the debates, showing us as the EMPTY CHAIR he is and two days later the unemployment rate shoots downward just after jobless claims were mildly lower than expected........

 

LMFAO!  Seriously?  Do you MORONS actually think the majority of America is that stupid?  What next fuel prices to hit $2 before the election?

Oct 5, 2012 4:42PM
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OOOHHHH, I know, I know, the goverment has been secretly hiring!!!
Oct 5, 2012 4:42PM
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President's dont have any effect on employment.  They are powerless to stop these dips and increases in employment, so its difficult to blame Obama for poor job performance.  The main culprit in unemployment is congress.  They hold the purse strings and the ability to act on issues.  Just as Democrats in congress kept fillibustering corrections to the housing market since 2001, its Democrats who oversaw the collapse in 2007 to 2009.  Its Democrats who oversaw the recession in the early '90s.  Its Democrats who oversaw the recession in the '50s.  Its Democrats who oversaw the Great Depression.  On the other hand every recovery to these have been seen by usage of Austrian Economics.  The effects of the crisis in the late 1970s were made minimal due to the appointment of a good treasury secretary under Carter that carried over with Reagan for a strong boom.  The effects in the 1950's were minimimized by Austrian Economics.  Today the recovery is starting to happen because Congress cannot act.  Surprise the economy turned around when Republicans took the house.

The President does not matter for employment, or economics.  Its the congress.  So when you are voting for reps and senators, Don't let Harry Reid have another 2 years as Senate Majority Leader.

Oct 5, 2012 4:34PM
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The numbers may not have been fudged.

 

But, considering all the road work going on everywhere I go, by towns that are "going broke", I swear the "Shovel Ready" dollars were delayed until this year, to ensure these numbers before November.

 

It may be a cynical view, to think so many Americans were left to suffer for three year, for an election gimmick. But it comes easily with our political process.

Oct 5, 2012 4:29PM
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I guess that the same number cookers from the mortgage and banking mess have found new employment......The articule said a rise in gov't jobs...

As for the comments about ignoring the data issues is remnisant of the way that folks were given mortgage loans....the ability to repay was ignored....

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So Obama caused all this mess in four years, this is crap and everyone knows it makes no sense. Take a sharp look at where things were and how much they've improved since he's been in the White House.  You don't have to like water to know it's good for you.  Obama is good for this country and need your help to get more things done.  Don't do it for him, do it for yourself, your family and loved ones..

Oct 5, 2012 4:28PM
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Here's a thought, its all a seasonal uptick. Because the teachers and admin are back in school, could that be the reason for these numbers??

Oct 5, 2012 4:25PM
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Please explain something. When we have 23 million people unemployed in August 2012 and the rate is 8.1%,how can adding 114,000 new jobs lower the rate to 7.8% in September?
Oct 5, 2012 4:24PM
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Is this clown for real? How does tax cuts to the middle class have anything to do with manufacturing increases here in the U.S.? This guy HAS to be a democrat who believe's he know's what he's talking about. If he or anyone else seriously believe's that the unemployment rate is under 8%, you need to go see a doctor and get your brain examined. Romney is right or atleast close. The real rate is at 11% or more. I'm willing to bet that if Obama wins a second term that unemployment will sky rocket right back above 8%, as will inflation start to take off . Obama has been in office 46 months now and unemployment has not gone under 8.1%, then in some miraculous stroke of fate, (just two days after the debate) the rate drops 0.3% and now the country is on the golden path of success! funny how i woke up this morning and gas prices were still rising, food costs were still rising, and my taxes were still the same.....rising! I'm not an Obama hater nor am i a fan of Romney, but if either wants to help the American public, STOP LETTING THE FED PRINT WORTHLESS MONEY! 
Oct 5, 2012 4:23PM
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WOW!!!! IT"S A MIRACLE!!! I never ever, ever thought this report would come so close to an election. Ever! LOL This is an example of "Hey we can say what ever we want and make up any kind of figures we want to "prove" the HUGE lie." They will buy this for sure!! WOW! Well i guess everything is fine now we can all just go back to work and......oh wait that's right I'm still not working cause there,s no work!! DOH! I must be mistaken though cause this guy says most people are working. They couldnt possibly be fibbing right? They have the numbers to prove that I'm just a dead beat that doesn't want to work. Absolutely a ridiculous lie. I know a bunch of people that no longer get unemployment that lost everything and no they don't get counted with there so called accurate numbers either! Wake me up when the B.S. stops! 
Oct 5, 2012 4:19PM
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Pepole would have to be fools to believe these stats. all of a sudden a drop within two days after the debate. C'mon; a 6% drop thart fast! what is this ? a bobsled track used for tracking unemployment?
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Being poor has to be devastating;  thought of as nothing and no body by your president is even worse.  It seems that no one notices jobs were an all time low when Bush was in the White House which continued until Obama got in.  Alll of a sudden eyes are opened, ears are listening  when it is said that Obama is bringing this country down. Regardless of what he does, for some, it's time to get him out of the White House.  He can do no good.  I said you in the 47% stop spending money he helped you get to feed your children and take care of your families.  I say continue on the path of the repubs and see where we end up.........further in the hole than we already are.  It doesn't take a rocket scientist to understand what Romney's mind is on, it's getting rid of all government assistance for those on it.  I am not on it, so it's not a problem for me but it would be devastating if I were. Can't you ear what Romney is saying...hopefully all the wealthy and well to do have no poor family members needing government......perhaps they will take care of them but I doubt it.

Oct 5, 2012 4:17PM
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Two government agencies have just defaulted on billion dollar payments.............the Post office and VA!  Enough said!
Oct 5, 2012 4:15PM
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7.8% unemployment  and 92.2% effing bull crap.... obammy can kiss my black azz
Oct 5, 2012 4:13PM
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You would have to have over 800,000 jobs to drop to 7.8%.  Liar liar pants on fire..
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