Stock Futures Fall After Payroll Data
August 06, 2004 08:37:00 AM ET
NEW YORK (Reuters) - U.S. stock futures fell on Friday after government figures showed that payrolls grew less than expected in July.
U.S. nonfarm payrolls rose 32,000, and the U.S. unemployment rate fell to 5.5 percent from 5.6 percent in June, according to data from the Labor Department.
Median forecasts were for nonfarm payrolls to rise 228,000 last month, with an unemployment rate at 5.6 percent.
S&P 500 futures for the September contract fell 9.7 points to 1069, below fair value, accounting for dividends, interest rates and time to expiration on the contract.
© 2004 Reuters
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Employment Growth Surprisingly Weak
August 06, 2004 08:32:00 AM ET
WASHINGTON (Reuters) - U.S. employers added a paltry 32,000 workers to payrolls last month, the government said on Friday in a report far weaker than expected that will come as unwelcome news for President Bush ahead of the presidential election.
The Labor Department also cut its tally of job growth for May and June by a combined 61,000.
The unemployment rate, however, fell to 5.5 percent from 5.6 percent in June as a separate government survey of households showed robust employment growth. The department cautioned that the household survey was a less reliable barometer of month-to-month changes in employment than its larger survey of businesses.
Wall Street economists polled last week had looked for a payroll gain of 228,000, although a weak employment reading from a service sector survey on Wednesday had some bracing for a weaker number. Still, the lackluster July figure was certain to surprise.
The Bush administration was likely to look on the bright side as the report showed 1.5 million jobs have been created in 11 straight months of hiring gains. However, Democratic White House hopeful John Kerry could accurately claim that the economy is still down 1.1 million jobs since Bush took office, despite the recent gains.
The report will also raise questions about how successfully the economy shook off a soft patch in June and may lead financial market participants to reassess the pace of rate rises expected over the coming months from the Federal Reserve.
Fed officials gather next Tuesday to plot interest rate strategy and are expected to add to a quarter-point interest-rate increase made in June.
© 2004 Reuters
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