- Title: USA: Better than expected payroll report lifts Wall Street to record highs
- Date: 3rd May 2013
- Summary: NEW YORK CITY, NEW YORK, UNITED STATES (MAY 3, 2013) (REUTERS) (SOUNDBITE) (English) JULIA CORONADO, CHIEF ECONOMIST FOR NORTH AMERICA, BNP PARIBAS, SAYING: "I think it's a relief, number one. We've seen a lot of very weak data and the labor market seems to be holding up better than we thought and that is definitely good news. But there are some details in there; much of the strength in recent months and over the recovery to date has come from sectors like restaurants, hotels, retail - that's a good full one third of the jobs created so far and it was most of the strength that we saw in March. So the worry there is that the quality of jobs is not so high and while the unemployment rate is coming down there's still a lot of under employment and clearly the unemployment rate is still very high. So there's still a lot of people that want to be working who aren't."
- Embargoed: 18th May 2013 13:00
- Keywords:
- Location: Usa
- Country: USA
- Topics: Business,Economy,Employment,Politics
- Reuters ID: LVA8T517CKQLAT7ORHFJ1RE4E6T0
- Story Text: The Dow and S&P 500 advanced to all-time closing highs on Friday (May 3), with major indexes jumping one percent after an unexpectedly strong April jobs report eased concerns about an economic slowdown.
The S&P closed above 1,600 and the Dow briefly traded above 15,000 for the first time as stocks extended this year's rally. Bellwether companies, including Chevron Corp, Boeing Co and Johnson & Johnson, reached 52-week highs.
The Russell 2000 stock index of mid- and small cap companies also hit a record, confirming the broadness of the rally. About 70 percent of stocks on both the New York Stock Exchange and the Nasdaq ended in positive territory.
Non-farm payrolls rose by 165,000 last month and the unemployment rate fell to 7.5 percent, a four-year low, from 7.6 percent, the government said. In addition, hiring was much stronger than previously thought in February and March.
Payrolls rose by 138,000 jobs in March, 50,000 more than previously reported, and job growth for February was revised up by 64,000 to 332,000, the largest increase since May 2010.
Investors welcomed the gains after weeks of disappointing data, including tepid manufacturing reports, that suggested the economic recovery was losing steam. But while the news was a move in the right direction, some economist caution that all is still areas of concern in the U.S. employment picture.
"I think it's a relief, number one. We've seen a lot of very weak data and the labor market seems to be holding up better than we thought and that is definitely good news," said Julia Coronado, an economist at BNP Paribas.
"But there are some details in there; much of the strength in recent months and over the recovery to date has come from sectors like restaurants, hotels, retail - that's a good full one third of the jobs created so far and it was most of the strength that we saw in March. So the worry there is that the quality of jobs is not so high and while the unemployment rate is coming down there's still a lot of under employment and clearly the unemployment rate is still very high," added Coronado.
The gains last month were far below the 206,000 jobs per month average of the first quarter, the latest evidence the economy is cooling, even if not as quickly as earlier feared.
Indeed, the data provided a number of signs of a loss of momentum.
Construction employment fell for the first time since May and manufacturing payrolls were flat. The length of the average workweek pulled off a nine-month high and a gauge of the overall work effort fell.
The Dow Jones industrial average was up 140.61 points, or 0.95 percent, at 14,972.19. The Standard & Poor's 500 Index was up 16.63 points, or 1.04 percent, at 1,614.22. The Nasdaq Composite Index was up 38.01 points, or 1.14 percent, at 3,378.63.
Both the Dow and S&P ended at all-time closing highs. For the week, the Dow rose 1.8, the S&P gained 2 percent and the Nasdaq rose 3 percent in its biggest weekly climb since the first week of the year.
General Electric, up 1.1 percent at $22.57 (USD), led gains among industrials after it won approval to buy oilfield pump maker Lufkin Industries for about $3 billion. The deal will allow GE to sharply increase its presence in the market to extract oil and natural gas from shale.
In other economic reports on Friday, U.S. factory orders fell sharply in March while the pace of growth in the vast U.S. services sector eased in April to the slowest pace in nine months.
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