Labor Market Woes Lead Dividend Stocks Higher as Interest Rates Lay Low

NEW YORK (TheStreet) -- Investors remain hot on dividend yielding stocks as the labor market news signals U.S. rates will stay low.

On Friday, Vanguard Dividend Appreciation ETF (VIG) spiked higher, just below its July peak, as the nonfarm payrolls report came in below expectations.

The ETF is most heavily weighted by Johnson & Johnson (JNJ) , International Business Machines  (IBM) , Coca-Cola (KO) , Exxon Mobil  (XOM) and PepsiCo  (PEP)

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VIG Chart
VIG data by YCharts

The U.S. payrolls increased by only 142,000 last month after expanding by 212,000 in July, according to the Labor Department. Moreover, payrolls data for June and July were revised to show 28,000 fewer jobs created than was previously reported.

Investors had expected the labor market to keep pace, having become accustomed to monthly payroll additions of more than 200,000 jobs for much of the year. The culmination of lower jobs growth, negative revisions to previous months and a strong downtrend in labor force participation in August led many analysts to conclude the U.S. economy is not as healthy as was previously thought.

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