The jobs report's hopeful signs boost stocks
The Dow jumps 68 as government says 236,000 jobs were created in February. The jobless rate falls to 7.7%. Construction jobs were a particularly bright spot.
Stocks enjoyed their best weekly performance of 2013 on Friday after the government reported the nation's unemployment rate fell to 7.7% in February, the lowest rate since December 2008.
At the same time, the Labor Department said a surprising 236,000 jobs were created in February. Most economists had been looking for a gain of 165,000 at most.
The report also said the economy added 246,000 private sector jobs. It was the third month in the last four that this category had topped 200,000.
The positive jobs report could be a signal that the economy may getting strong enough to bring the national unemployment down further. The rule of thumb that economists have used is that 200,000 or so new jobs a month are needed to lower the unemployment rate.
The jobless rate hasn't been below 7% since November 2008, when the full force of the recession slammed into the economy, and the Federal Reserve has promised to keep rates at ultra-low levels until the unemployment drops below 6.5%.
A pleasant surprise in the report was that the construction sector added 48,000 jobs in February, the most since March 2007. That total includes a small gain in residential construction, which has been slow to recover from the housing bust.
Thanks to the news, the Dow Jones industrials ($INDU) jumped 84 points at the open. The gains faded, but the index regained its momentum in the afternoon, finishing up 68 points to a record close of 14,397.
The blue chips hit a new intraday high of 14,413.17 as well.
The Standard & Poor's 500 Index ($INX) gained 7 points to 1,551. That was just below its high of the day of 1,552.48 and within 14 points of its all-time closing high of 1,565.15, set on Oct. 9, 2007.
The Nasdaq Composite Index ($COMPX) had gained 13 points to 3,245.
The Dow, of course, broke its 2007 closing high on Tuesday. Today's gain was the Dow's sixth in a row, its second six-day winning streak in 2013. It was also the sixth straight gain for the S&P 500, which had an eight-day winning streak in January.
For the week, the Dow rose 2.2%, its best showing for a full week this year. The Dow ended the week of Dec. 31 up 3.8%. The S&P 500 had a 2.2% gain, while the Nasdaq climbed 2.4% a 2.4% gain in its sights.
For the year, the Dow is up 9.5%, its best start to a year since 1999. The S&P 500 is up 8.8%, while the Nasdaq is up 7.5%.
This latest unemployment report comes as many worry that federal budget cuts set in motion by a congressional impasse could increase the ranks of the jobless in the months ahead.
Those cuts went into effect March 1 and aren't reflected in the February report. But pressure on government payrolls was evident, with the public sector losing 10,000 jobs last month. Private employers added 246,000 positions.
The report will also boost the volume in the debate over whether the Federal Reserve should stop its $85-billion-a-month bond-buying program. The program, a third round of so-called quantitative easing -- is designed to keep long-term interest rates low to support the economic recovery.
There were some warts in the report. Overall employment was up, but the labor force shrank by 130,000. The labor participation rate fell slightly to 63.5%. That's a rate that prevailed during the economic slowdowns of the early 1980s and is not healthy.
And Philippa Dunne and Doug Henwood of the Liscio Report noted that the the biggest share of job gains went to those workers without a high school diploma. Over the past year, job seekers with at least a bachelor's saw the most job gains.
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The stock market and those who are involved in it are a bunch of idiots to believe that the economy is getting better.
The stock market is also not a correct representation of the majority who are suffering so severely. The richer are getting richer obviously, but the majority are in serious trouble.
How can anyone who can do simple math find this jobs report promising?
236,000 jobs created in February. Construction would certainly be down during the coldest of winter. February does have a few warm days, especially in the South. So, nothing there to report. Now, the jobless rate falls....expected with a few warm days and in Construction. And, Constructiona bright spot. All I see going up is hospitals, doctors offices and clinics. Those are "housing" jobs too. When all are addicted, there still won't be enough medical establishments to serve the addicts. But, when nobody is working, due to the legal drug dealers, the problem will take care of itself. No jobs, no taxes, no money for guvymint to waste. Then, maybe they'll shut down and turn our the lights.
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Investors are anxious to see if hiring can maintain its strong pace in the second half of the year.
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