Stocks tanked early in the trading session after a disappointing jobs report. The Dow was down as much as 170 points. But they slashed those losses.
First the scoreboard:
Dow: 14,565, -40.8 pts, -0.2 per cent
S&P 500: 1,553, -6.7 pts, -0.4 per cent
NASDAQ: 3,203, -21.1 pts, -0.6 per cent
And now the top stories:
- U.S. companies added just 88k jobs in March. This was a lot lower than the 190k economists were looking for. Retail sector jobs actually plunged by 24k, which is particularly worrisome. This could be a sign that the recent payroll tax hike and all of the uncertainty coming out of Washington is starting to hit the consumer. Here Are The 18 Biggest Mass Layoff Announcements Of The Last Year >
- The jobs report challenged two big U.S. economic stories: the energy boom and the manufacturing renaissance. After 27 straight months of growth, oil and gas extraction industry payrolls actually fell. The manufacturing sector lost 3,000 payrolls. On a percentage basis, the rate of manufacturing sector payroll growth has been decelerating more than average.
- The unemployment rate unexpectedly fell to 7.6 per cent from 7.7 per cent. But it fell because the labour force participation rate fell to 63.3 per cent, the lowest level since 1979. Some of this is likely due to discouraged worker who fall out after been turned off by the poor job market.
- However, UBS’s Drew Matus notes that the participation rate move is actually due to demographics, not discouragement. From a note he circulated: “In 2012 the participation rate declined from 64.1 per cent to 63.7 per cent. This decline was the result of a decline in the prime working age (aged 25-54 years) population that was only partially offset by rising participation among older workers (aged 55 years and over). These movements are a continuation of labour force developments that have been underway since the financial crisis… An increase in the number of discouraged workers is only a minor factor in the decline in the LFPR.”
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