Strong Jobs Market Data Boosts Futures

Strong Jobs Market Data Boosts Futures

Stock futures rose on Friday behind strong unemployment data this morning with futures for the Dow gained 96 points, the S&P 500 adding 13 points and the Nasdaq advancing 26 points.  

Strong Jobs Market Data Boosts Futures
Strong Jobs Market Data Boosts Futures

The growth followed a relatively stable Thursday close for the stock exchange. Futures’ rise does not automatically indicate a strong day for the stock markets, but with the positive data economists tend to be more optimistic.

“If there was concern of the economic revival being temporary, this report would suggest that it’s not,” Michael Strauss, chief investment strategist of Commonfund, told the Wall Street Journal. “Today should be a day where participants in the equity market focus more on the good economic news and what that’s going to mean for sales and earnings, and not the challenges in Europe and many of the other emerging markets.”

Payrolls rise, unemployment falls
The Labor Department released data indicating a 248,000 gain in payrolls in September, according to Bloomberg. The advancement topped Bloomberg analysts’ median estimate of 215,000 payrolls and the 180,000 expansion in August. Additionally, US unemployment dropped to 5.9%, the lowest level since July 2008.

“This report was strong across the board,” Dean Maki, chief US economist at Barclays PLC in New York, told Bloomberg. “The labor market continues to grow fast enough to keep pushing the unemployment rate down.”

Fed’s next move
With the strong data, some economists wonder when the US Federal Reserve will feel the economy is strong enough to warrant an interest rate hike. But the Fed takes other figures into account as well, like underemployment and worker pay, Bloomberg reported.

Through September the Fed continued to reduce its monthly bond purchasing and guaranteed it would keep rates near zero after the buying program ends.
During a September 17 meeting, Federal Reserve Chair Janet Yellen expressed concern that many Americans are working part-time and want to work full-time, while many others cannot find the job they desire. Until those labor resources are fully exploited, the market will not reach its potential.

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