The economic recovery of the U.S. is slowing down and we can tell this from the September numbers published in the jobs report. Nonfarm payrolls rose by a lower than expected 661,000 in September and the unemployment rate was 7.9%, the Labor Department said Friday in the final jobs report before the November election. Economists surveyed by Dow Jones had been expecting a payrolls gain of 800,000 and the unemployment rate to fall to 8.2% from 8.4% in August. The payrolls miss was due largely to a drop in government hiring as at-home schooling continued and Census jobs fell. I wonder, with these disappointing reports and President Trump testing positive for Coronavirus if stocks will keep heading down. Also, will the number of jobs available keep decreasing if there is another spike? What will Trump do to create more jobs in the next month?
https://www.cnbc.com/amp/2020/10/02/jobs-report-september-2020.html?__twitter_impression=true
3 comments:
Interesting thought. If stocks are heading down, I do not necessarily think its accredited to the job report. Trump testing positive for COVID might have something to do with it considering that it creates a lot of uncertainty. The main thing that is pulling the stocks down is the election. It is not uncommon to see stocks fall during election times so afterwards I am sure it will start to increase once again. Also, I could see a continued decrease in jobs with another spike because it might lead to a shut down or lack of business ultimately making businesses have to downsize to stay afloat.
Although I do think the jobs report and Trump testing positive has impacted the stock market, I think this information is priced in at this moment. Unless there is some massive economic shock due to a shutdown or spike in COVID cases, I expect that the market will remain primarily flat during the coming months due to uncertainty about the election (as mentioned by Cole). But besides that I do not expect any major fluctuations in the market with our current environment without significant news.
In terms of the jobs report, I expect that it will continue decrease month to month as we move forward. Some of this should be due to a drop in the labor force due to discouraged workers as well as some industries begin to return to full capacity in the coming months.
It will be interesting to see what the market does. Historically with September finishing up, the end of year will finish up. Similarly to what Chase said, the jobs report and Trump's positive test should be factored into stock prices currently, so moving forward their impact should not be shown within the market.
One thing worth considering when looking to market performance over the last 3 months of the year, the government is getting closer to agreeing on a second round of stimulus package. Notably, they are planning on bailing out the airline industry, which likely will influence their stock price to increase.
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