The effects of the government shutdown on hiring were greatly
exaggerated, according to the monthly non-farm payrolls report.
Despite the poor sentiment from 17 days of public sector and
government contractor furloughs, the US added 204,000 jobs to the
payrolls in October. The unemployment rate held steady at 7.3%.
This blew past bearish forecasts. Economists predicted just 120,000
new hires last month. Government shed 8,000, but the only other
sector to tighten was wholesale trade, which declined by 5,400
heads. Leisure and hospitality jobs increased the most at 53,000.
Retail and finance were tied for second place with 44,000 jobs
August's data was revised upward to 238,000 from 193,000 and
September was revised up to 163,000 to 148,000.
Stock indices dropped sharply yesterday, erasing early gains on
better-than-expected US GDP and an interest rate cut in Europe.
Futures were mixed this morning before the jobs report came out.
(INDEXDJX:.DJI) futures were down 0.06% at 15,558.00 while futures
(INDEXSP:.INX) rose 0.09% to 1,746.80.
(INDEXNASDAQ:.IXIC) futures climbed 0.14% to 3,324.25.
Still to come today is the Reuters/University of Michigan consumer
sentiment index, which is slated to rise to 75 from 73.2 for this
month's initial reading. Federal Reserve Chairman Ben Bernanke, San
Francisco Fed President John Williams, and the Atlanta Fed's Dennis
Lockhart will also deliver speeches today.
European stocks also declined today as Standard & Poor's cut
France's credit rating to AA from AA+ due to poor prospects for the
country's economic growth. S&P's analysts "believe lower
economic growth is constraining the government's ability to
consolidate public finance." The ratings agency's outlook for
France is stable. Today, France reported that industrial production
is down 0.9% year-over-year.
German exports rose 1.7% in October, surpassing forecasts of a 0.4%
rise. On a yearly basis, exports are up 3.6%. Imports fell 1.9%
from September to October, however. Germany's trade surplus rose
19% to a record high of 18.8 billion euros.
China's trade surplus unexpectedly doubled in October to $31.1
billion. On a yearly basis, exports were up 5.6% and imports rose
7.4%. Both figures greatly exceeded forecasts. This weekend,
China's leadership will discuss comprehensive reforms that might
free farmers from constraints, liberalize interest and exchange
rates, and hand more power to the private sector. China-watchers
say that this week's reforms could be the biggest policy change
since Deng Xiaoping introduced export-oriented capitalism decades
In corporate news,
) shares have pulled back this morning after a 73% pop at
yesterday's IPO. Shares were off 2.5% this morning.
Shares of the
Walt Disney Company
) were down 1.3% despite the company's better-than-expected
earnings report. Earnings in the fiscal fourth quarter rose to
$0.77 per share from $0.68 per share a year earlier. Revenue rose
7.7% to $11.6 billion.
The data breach at
) was worse than initially reported. The security firm LastPass
said that it found that hackers have data belonging to 152 million
Adobe accounts. This is more than three times the number of
affected accounts that Adobe initially disclosed.