The Weather Generates Debate About the Strength of Employment
Stocks gyrated after the US released its payroll report, which came in much weaker than expected. There was a disparity when comparing the corporate non-farm payroll report with the household survey which led to market volatility. Apple announced a 14 billion dollar buy back, while LinkedIn tumbled after weaker than expected earnings results.
The U.S. economy created a disappointing 113,000 new jobs in January, according to the Labor Department. Analysts expected nonfarm payrolls to increase by 185,000 jobs last month. The unemployment rate declined to 6.6% which is the lowest print since October 2008 while the labor participation rate increased showing that more workers entered the market. In December, the unemployment rate fell steeply to 6.7 percent from November’s 7.2 percent. The divergence in the household and corporate numbers is a difficult scenario decipher. Maybe blame the weakness in the non-farm payroll number to the cold and stormy weather the US experienced in both December and January.
Construction companies added 48,000 workers in January after reducing employment by 22,000 a month earlier. Employment at private service-providers increased 66,000 last month, a slowdown from the 102,000 jobs added a month earlier. Government employment slumped 29,000 in January, the most since October 2012.
Apple announced on Friday that it has embarked upon a 14 billion dollar stock buyback plan which will take place over the next two weeks. The stock has rebounded smartly from its lows near 500 and should continue to feel a bid as the company purchases shares.
LinkedIn’s Q4 earnings beat Street expectations, but shares in the online professional-networking service dropped it provided revenue guidance that was below consensus. Q4 net income fell to $3.8 million from $11.5 million a year earlier, while adjusted EPS was $0.39 and sales rose 47% to $447.2 million.
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