July Non-Farm Payrolls
Friday morning, August 3, 2012, the Labor Department reported the July Non-Farm Payrolls report.
- Headline figure rose +163,000, well above consensus estimates for +100,000
o Last month’s figure was revised lower from +80,000 to +64,000
- Private Payrolls rose +172,000, again well ahead of consensus estimates for +110,000
o Last Month’s figure was revised lower from +84,000 to +73,000
- The Unemployment Rate rose from 8.2% to 8.3%
- The Underemployment Rate rose from 14.9% to 15.0%
- Manufacturing Payrolls rose +25,000, ahead of consensus estimates for +10,000
- Average Weekly Hours worked was unchanged at 34.5
- Average Hourly Earnings rose +0.1% month on month, below last month’s +0.3% gain
- Average Hourly Earnings rose +1.7% year on year, again below last month’s +2.0% gain
COMMENTARY: The SP 500® Index (SPX) (Figure1.2) continues to maintain its bullish near term formation despite this week’s disappointing overall economic headlines. Today’s better-than-expected Labor report will be the first relatively strong economic headline for the markets to trade off. A close today above last Friday’s 1385.97 three-month high will be important in order to maintain that near term bullish momentum. Investors should also watch the 10-year U.S. Treasury (Figure 1.3) as an important indicator for further SPX upside potential. A 1.60% print in the 10-year may initiate some minor bond to equity reallocations.
Fig 1.1 U.S. Private Sector Jobs, August 2011 to August 2012
Fig 1.2 SP 500 Index SPX Year To Date
Fig 1.3 US 10 year Treasury Year To Date