Stock Market Spikes On News Of Record Job Numbers


This ARTICLE On Stock Market Spikes On News Of Record Job Numbers Was PUBLISHED On November 2nd, 2019

Stock Market Spikes
Gustan Cho Associates

Ever since President Donald Trump took office, the economy has been booming.

In this article, we will cover and discuss Stock Market Spikes due to record job numbers.

Stock Market Spikes On News Of Record Job Numbers And Continued Optimism

What are Stock Market Spikes On News Of Record Job Numbers And Continued Optimism

All major indices in the stock market hit record levels on the news of record job numbers. The Dow Jones Industrial Averages, S & P 500, and the Nasdaq all closed Friday at record levels with the news of record job numbers.

According to Alex Carlucci, market analyst for Gustan Cho Associates Mortgage News:

The labor market shows resilience, leading some investors to believe recession fears were overblown. The United States added 128,000 jobs in October as the jobless rate ticked up to 3.6 percent, outperforming analyst forecasts during a month in which one of the largest private-employer strikes in recent years weighed on the economy. The number was below recent averages but signaled that the labor market remains resilient and healthy 11 years into the economic expansion. The Standard & Poor’s 500 and Nasdaq stock indexes closed at record highs amid growing signs that recession fears several months ago might have been overblown.

In this article, we will cover and discuss Stock Market Spikes On News Of Record Job Numbers as well as what this means to the housing and mortgage markets.

Analyzing Data Released On Friday

What is Analyzing Data Released On Friday

Karen Cordes, the Chief Mortgage Underwriting and Operations Manager at Gustan Cho Associates said the following:

The new data was somewhat skewed because of a General Motors strike, in which 46,000 workers shut down production for six weeks at the automaker, causing layoffs from Canada to Mexico in related industries, and sent unemployment claims in states such as Michigan surging. For now, we can take solace that there are sufficient jobs and wage gains to support the economy and keep it miles away from any recession.

The job reports on Friday resulted in the S & P Index to go up by 1.0 % to 3a record high to 3,067. The news spiked the Nasdaq which spiked 1.1% to a historical high of 8,386. The Dow Jones Industrial Average rose over 300 points, again setting another historical high record.

Karen Cordes continued:

The Bureau of Labor Statistics, which released the report, noted the effects of the GM strike. The number of workers in auto and parts manufacturing declined by 42,000. Federal employment decreased by about 17,000, as temporary workers engaged in the 2020 Census completed their work. Those numbers indicated that the economy would have generated about 187,000 jobs in October if not for the strike and Census completions, besting the monthly average of about 167,000 for the year. For forward-looking policymakers and investors, that would be the number you want to hang your hat on going forward. That implies strong spending going forward, which will prevent the economy from entering a downturn anytime soon. If not for the strike, the report would have been a blockbuster. The Bureau of Labor Statistics also revised the monthly job total from August and September upward, to a net of 95,000 more jobs.

A few days before the jobs report, the U.S. Department of Commerce issued numbers that reflected a slowdown in the economy from July to September. The Feds also announced this week that they cut interest rates by 25 basis points in fear of a slowing economy. The interest rate cut by the Feds was the third cut this year. Besides the slowing economy, the Federal Reserve Board was concerned with the trade war with China and a way to boost the economy and try to avoid a recession.

President Trump released the following statement after the jobs report news hit the wires:

Wow, a blowout JOBS number just out. This is far greater than expectations. USA ROCKS! Don’t write off the economy just yet. It’s got a lot of fundamental strength.

There more jobs in the marketplace than workers. It is getting harder and harder for employers to find qualified workers. Wages are expected to increase if the unemployment rate goes down further in the coming months.

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