Jobs Report No Good for Bulls or Bears
(
Updated with breakdown of job losses by sector, list of companies that cut jobs in August
.)
WASHINGTON (
) -- Job loss in August was less than expected. The unemployment rate is at a 26-year high. Investors don't seem to know what to make of the government's latest employment report.
The Labor Department said Friday that the U.S. economy lost 216,000 jobs last month, the 20th straight month of declines and the smallest in a year. The consensus was for a loss of 225,000 jobs. The nonfarm payroll losses in August shrank from a revised loss of 276,000 in July and a revised 463,000 in June.
In another sign the labor market has a long way to go in its recovery, the unemployment rate jumped to 9.7% from 9.4% in July. That's the highest unemployment rate since June 1983. Analysts had forecast an unemployment rate of 9.5%.
Immediately following the employment report's release, U.S. stock futures surged, although the major U.S. averages opened only modestly higher. Paul Mendelsohn, chief investment strategist with Windham Financial, said that some market participants may see the glass half full as job losses are shrinking, while those who doubt a quick economic recovery will find the rising unemployment rate concerning.
"For today, the market wanted to go up before the number and it wants to go up after the number," Mendelsohn said. "There was nothing in this report that pushes either the bullish or bearish case. There was nothing in the numbers that tells you anything or changes anything."
Since December 2007, when the recession took hold, employment has fallen by 6.9 million, the Labor Department said. Although job losses continued in many of the major industry sectors in August, the declines have moderated in recent months.
Goods-producing employment continued to trend downward, contracting by 136,000 last month. Construction employment declined by 65,000 and manufacturing employment slid by 63,000.
Meanwhile, service-providing employment fell by 80,000 in August, the smallest loss in a year. Financial activities accounted for 28,000 of that decline, and retail trade saw employment decrease by 10,000.
Employment in health care continued to rise, increasing by 28,000 in August, the Labor Department said, with gains in ambulatory care and in nursing and residential care.
Among the companies that cut worker headcounts in August were
General Electric
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,
Altera
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,
Lockheed Martin
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and
Whirlpool
(WHR) - Get Report
.
-- Written by Robert Holmes in New York
.
