The United States Department of Labor’s monthly job report was released today and included what many are interpreting as very positive news regarding the economy. The nation added 200,000 jobs in December, according to the report, dropping the national unemployment average to 8.5 percent, the lowest level since early 2009.
Private Sector is Hiring
The expansion of some 200,000 jobs came entirely from the private sector, which added 212,000 jobs according to the report, while the public sector contracted by some 12,000 jobs as public schools and other local agencies cut back. The report also revised November’s data to show an increase in jobs of 120,000 and unemployment of 8.7 percent. “There is more horsepower to this economy than most believe,” said Sung Won Sohn, an economics professor at California State University, Channel Islands. “The stars are aligned right for a meaningful economic recovery.”
The positive news was preceded by data from ADP (ADP) yesterday that showed private payrolls swelling by some 325,000 with weekly unemployment applications falling to just 372,000. A number of different statistical factor were all pointing towards positive even as some economists urged restraint due to seasonal adjustment. The ranks of the underemployed, a combination of those without jobs or who are working part time when they would rather be full time, fell from 15.6 percent to 15.2 percent. Manufacturing, often a source of economic pain in recent years, saw an increase of 23,000 jobs. “People were very much thinking that the sky was falling,” said Tom Porcelli, an economist at RBC Capital Markets. “It’s no small victory that we’re up here, even with all these headwinds.”
The Obama administration, which most likely needs improvement in the economy to win re-election, “We’re moving in the right direction,” Barrack Obama told workers at the financial protection bureau. “We have made real progress. Now is not the time to stop.”
Markets Fail to React
The positive economic news didn’t appear to garner so much as a flinch from the markets. The S&P 500 and Dow Jones both fell slightly in early trading, with neither dropping more than 0.3 percent, while the Nasdaq gained over 0.25 percent. Among the biggest movers was the Dendreon Corp. (DNDN) which jumped almost 13 percent on further positive news about the sale of its primary pharmaceutical product, Provenge. Dendreon released data yesterday showing a month-over-month increase in Provenge sales of over 25 percent and a year-over-year increase of more than 300 percent. It’s the second straight day of gains for the company, which is now up almost 60 percent over two days.
Donut makers Krispy Kreme (KKD) jumped over 10 percent while Netflix (NFLX) showed a desire to change its fortune in 2012 by gaining just short of 10 percent, putting it up almost 20 percent on the week. The day’s big losers included RF Micro Devices (RFMD), down almost 20 percent on revisions to its Q3 guidance, and Integra LifeSciences Holdings Corp. (IART), which lost about 18 percent on disappointing preliminary results on the fourth quarter.