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Economic Data Continue to Confound Markets

An unexpected 44,000 jobs were lost last month, but consumer sentiment beat expectations.
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Updated from 9:12 a.m. EDT

Wall Street received a mixed bag of economic data on Friday, including the much-anticipated and all-important employment report from the federal government.

The economy unexpectedly lost 44,000 jobs last month, but the unemployment rate fell to 6.2% in July as the size of the nation's workforce declined, according to a report from the Labor Department.

A

Bloomberg

survey indicated that analysts expected the unemployment rate to fall to 6.3% in July from 6.4% in June. Analysts were also looking for 10,000 jobs to be added to nonfarm payrolls. In June, 72,000 jobs were lost, the government's revised numbers showed.

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The manufacturing sector lost 71,000 jobs in July, and the services sector gained 23,000 workers, the Labor Department said. Temporary help and other administrative services added employees.

Overall payroll employment has declined for the past six months. The civilian labor force decreased by 556,000 in July to 146.5 million.

According to the monthly report, the average workweek for production or nonsupervisory workers on private nonfarm payrolls decreased by 0.1 hour in July to 33.6 hours, seasonally adjusted. Average hourly earnings increased by 5 cents to $15.44.

And the Other Reports

Separately, the Institute for Supply Management reported that the purchasing managers' index jumped to 51.8 in July from 49.8 in June, breaking the 50 mark, which signals positive growth, for the first time since February. Economists, however, expected the index to reach 52. New orders and inventories increased, while employment held steady and prices dropped.

The University of Michigan reported its consumer sentiment index climbed to 90.9 in July from a midmonth reading of 90.3, and from June's 89.7. The report beat expectations, as economists had pegged the index to land at 90.5, and stood in stark contrast with Tuesday's news from the Conference Board that its consumer confidence index fell to 76.6 in July from 83.5 in June.

Personal income and spending both increased 0.3% in July, according to the Commerce Department. Personal income rose in line with expectations, but personal spending fell short of the 0.4% increase predicted by analysts.

Also, a report on construction spending in June from the Census Bureau was disappointing, staying flat while economists were looking for a 0.4% gain.