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A Disappointing Jobs Report: 3 Investing Takeaways
January 15, 2014 at 19:00 PM EST
Despite a big drop in the unemployment rate, last Friday’s non-farm payroll report was a huge disappointment. The unemployment rate drop was driven by more Americans leaving the workforce. As a result, the participation rate fell to 62.8%, tying a 35-year low set in October. Meanwhile, job creation in the United States plunged to the lowest level in years, and wage growth remains elusive. The report’s bottom line: While the economy is improving, the labor market is still lagging, bedeviled by structural problems. So what are the investing takeaways? As I write in my new weekly commentary, there are three key implications for investors. 1. Remain cautious on U.S. consumer companies, both discretionary and retail. While the economy is improving, consumption remains soft and last week’s labor market report confirms why. Other than the top of the income ladder, consumers have been spending from savings and wealth gains, not income. [...] Click here to read the original article on ETFdb.com. Related Posts: No Related Posts
Despite a big drop in the unemployment rate, last Friday’s non-farm payroll report was a huge disappointment. The unemployment rate drop was driven by more Americans leaving the workforce. As a result, the participation rate fell to 62.8%, tying a 35-year low set in October. Meanwhile, job creation in the United States plunged to the lowest level in years, and wage growth remains elusive. The report’s bottom line: While the economy is improving, the labor market is still lagging, bedeviled by structural problems. So what are the investing takeaways? As I write in my new weekly commentary, there are three key implications for investors. 1. Remain cautious on U.S. consumer companies, both discretionary and retail. While the economy is improving, consumption remains soft and last week’s labor market report confirms why. Other than the top of the income ladder, consumers have been spending from savings and wealth gains, not income. [...]
