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.

Oct 5, 2012 3:42PM
Johnathan,.....you're full of it.
Oct 5, 2012 3:40PM

You conservatives are pathetic.

When the numbers are bad you get a woody tearing up Obama. When the numbers are getting better you claim "liberal media bias" and the always safe "conspiracy theory" crap. All of you conservatives should be happy the economy is growing ... not that its getting worse so your people can win. 

If this is the kind of America the conservatives want, with people willing to throw away a country to justify their political ends, they might as well move to Iran. You would be welcomed there.


Oct 5, 2012 3:39PM
In the last month of GWB's admin, December 2008, we lost 884,000 jobs.  Millions of jobs were lost in 2008 alone.  GWB's last budget was a $1.2Trillion deficit.  According to Romney, Obama "Doubled the Deficit".  Well, that is just ONE in a long string of lies.  Reagan came into office with a $1T national debt. When he left, it had exploded to $2.85 T.  GWHB doubled down.  Extracted the interest on Reagan's and GHWB debt, Clinto added ZERO to the debt. GWB more than doubled the debt to over $10T.  SO: When Obama entered office, the last 3 Rs had increased the National Debt by 1000%, leaving behind an economy losing nearly 1 Million jobs per month.  We should re-elect an R???? NO THANKS
Oct 5, 2012 3:38PM
Doctored up numbers I'm sure.....It's awful funny after almost 4 years and one month before the big election, the unemployment rate finally drops to under 8% to 7.8%. It looks like a little Chicago style politics to me. If Mr.Obama thinks that after four years a 7.8% unemployment rate is good, he really does need to find a new line of work. 7.8% is unacceptable and I assume it only went down to 7.8% because George Soros hired a few more part time grounds keepers to pump up the numbers for Mr.Obama.
Oct 5, 2012 3:37PM
Look at the numbers behind the numbers they just put out today. I am a small business owner and our sales have declined over the past four years with the GREATEST drop being in just this past year. Maybe the first year or two Obama could have blamed it on Bush, but he owns THIS economy now. He had a DEMOCRATIC congress his first two years.....plenty of time to put some pro business policies in place, but he squandered his time. There's no way in the world we could afford to hire more employees right now. 
Oct 5, 2012 3:35PM
If you take just the work force and divide that by the 23 million unemployed, you get a number more like 65% of the work force is unemployed.  Then looking at the 12 million illegal aliens, if you replace them with american workers you cut the unemployment in half, and get rid of the drag of illegal aliens sucking off welfare.  Of course that is a lot of Obamma votes lost.  
Oct 5, 2012 3:33PM

Let's talk about how good the job market is to the RN's that just got laid off at my hospital.

Oct 5, 2012 3:31PM

High unemployment will be the new norm is Obama and the Dems stay in the White House. They want more people to be dependant on the government and to grow the government even more!!!


We need to focus on creating jobs, balancing the budget, getting people off of entitlements and taking care of our own fiscal house before we end up like the countries in the EU!!

Oct 5, 2012 3:31PM
So how did unemplyment go down when just yesterday they reported that the number of people that filed for unemployment went up?

Oct 5, 2012 3:29PM

spelling error

Bullish should be  ****

Oct 5, 2012 3:25PM
..."look at how the Bureau of Labor Statistics calculates its job market data – and why economists pay much more attention to long-term trends than the month-to-month changes that tend to dominate political rhetoric.

The unemployment data comes from two sources.

The first is a representative household survey of about 60,000 American households, which is conducted monthly.

The researchers count people as employed if they have worked in the past week, and they are considered unemployed if they haven’t worked but have actively looked for work in the past four weeks. The unemployment rate is not calculated based on who is collecting unemployment benefits.

The household survey, from which that 7.8 percent unemployment rate was calculated, is considered valuable because it includes self-employed people and others who might not show up in the payroll"...

Oct 5, 2012 3:24PM
Such hatred I read in these comments !  Most of you should be ashamed. Neither candidate is evil. Both are Americans & loyal. Different ideas.  I am not naive - there is always corruption in ANY organized group ( from religion to politics ).  There is always ego involved with those who believe they can be leaders.  ... having said that, the choice is between a democratic candidate  ( & standing president ) who believes in slow & balanced growth for all citizens, versus the republican candidate who believes we should trust big business & the rich to deal fairly with their lowly employees with little to no regulation.  Mr. Romney simply has no understanding of daily life for those less fortunate than himself.  He doesn't understand that we can't "go ask our parents" for money. His parents had the money.  Most parents in this day don't have the money.     By the way ... slow & balanced growth is exactly what our form of government is based upon -- 3 branches of government designed to balance each other, preventing change from being too swift and thereby avoiding  negative & potentially disastrous long-term results.   Change takes time.  More than 3 1/2 years.  Nothing gets done well when we rush headlong without reviewing the consequences of our haste. 
Oct 5, 2012 3:24PM
It's funny at how the news is reporting that unemployment numbers went down, but this doesn't include the people who stopped looking or just dropped out of a job search all together. I have a question for the news, HOW DO YOU REALLY KNOW IF THE PEOPLE DROPPED OUT OF JOB SEARCHING OR JUST GAVE UP, MAYBE THERE ARE LOOKING EVER DAY AND NO JOBS ARE CALLING THEM, DID YOU EVER THINK OF THAT? I know for a fact that people are looking and trying but companies or jobs are not calling them and there are still unemployed and buy the way a PART-TIME JOB DOES NOT MAKE UP FOR A FULL-TIME JOB, the pay is garbage, there's no health benefits, etc., now ask yourself could you go from a good paying job to a garbage part-time job paying you almost nothing at all? I doubt it very much, so before you speak, maybe you should walk in the shoes of that person and down that person's path?????????????? Unemployment numbers are a joke and will be for a very long time, no matter what president gets into office because there is no longer enough jobs in this country or even in any of the states, period. Unemployment is also kicking people off of there benefits, that's also why they are really going down, that's the real truth!!!!!!!!!!!!!!!!!!!!!! Not because of people finding jobs, because PART-TIME JOBS don't make up for FULL-TIME JOBS!!!!!!!!!!!!!!
Oct 5, 2012 3:24PM
Forgive me if I'm wrong, but are we celebrating 7.8% unemployment???  Is this going to be the new norm?  Well, I still think this way too high and don't see why or how it could be helpful to Obama.  Actually, it's seem sad:(    Have we really fallen that far?
Oct 5, 2012 3:22PM

What I love more than anything is when GW was President ALL THINGS were possible. He was guilty of a range of criminal offenses that he should have been impeached according to MSN if you go back to when he was in the White House.

But now that Obama is President all of the conspiracy's that are being floated about are by NO MEANS fact. That is if you believe MSN and any other of the writers of articles that are put on this website!!  

Oct 5, 2012 3:20PM
So some of you believe that if we give a $250K tax break to those making $1MM or more and those making less lose some of our tax credits like Mortgage and child, our economy will pick back up? How will our elected officials pay for those changes? I still haven't heard a single detail just vague lines. Lets see he'll open the Alaska Pipeline and that will create jobs? How many of you out there gonna go work on the line? I want to hear some details from Mitt. Until he gives me specifics, he's not getting my vote. If he can't explain it, he can't lead it.
Oct 5, 2012 3:19PM
Not like the other 3% didn't stop looking for work or anything... Jobs are STILL DOWN!!
Oct 5, 2012 3:18PM
This is BS (as in Bary Sateo) stats!  They are cooking the books by not including as many people looking for work - and these people at NBC/ MSNBC are spinning for Obama.  Check the price of gas, food, etc. and then, vote out Obama!
Oct 5, 2012 3:13PM
More BULL SHIITE !     Sure jobs on the Rise -  Where In CHINA ?
Oct 5, 2012 3:11PM
what scares me is that obama is going to steal the election through fraud. we already know that his administration is doing everything they can to make it ok for illegals to vote, while at the same time they are shutting down american military personnel from voting. we are going to have to work hard to get americans to vote for Romney, to overcome obamas illegal votes.
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