10:30 AM New York – Stocks on Wall Street opened higher after private sector added more than expected net new jobs in October. However, most of the job additions are at low wages as retailers’ bulk up for the holiday selling season. Unemployment rate increased to 7.3%.
Stocks on Wall Street struggled but remained in positive territory after the latest jobs reports showed a surge in private sector job additions in October.
Employers at all levels added more than expected jobs despite a partial federal government shutdown for 16 days in the month.
S&P 500 index increased 9.66 to 1,756.81 and Nasdaq Composite Index gained 34.48 o 3,891.81.
In Europe markets traded lower following sharp declines in Asian markets.
In London, FTSE 100 index declined 0.2% to 6,684 and in Frankfurt DAX 30 index fell 0.5% to 9,038. In Paris, CAC 40 index dropped 1% to 4,239.
In Asian trading and in Tokyo Nikkei index dropped 1%, in Hong Kong Hang Seng index declined 0.6% and in Mumbai the Sensex index fell 0.8%.
Markets in Asia reacted negatively to the faster than expected economic growth in the U.S. and worried that the Federal Reserve may bring forward its tapering timetable.
Private Sector Hiring Picks Up, Unemployment Rate 7.3%
U.S. employers at all levels added new positions as private sector expanded payrolls at faster than most optimistic predictions.
Private and government payrolls expanded 204,000 in October, the Labor Department said today. The surge in employment was in sharp contrast to what economists had been expecting.
In addition, the Labor Department also revised higher jobs data in September and August by 60,000 – to 238,000 in August and 163,000 in September.
October jobs data were driven by a strong hiring by retailers. Retailers added 44,400 net new jobs as chains began to prepare for strong holiday season.
Restaurants, hotels and other leisure industry related services added 53,000 jobs in September.
Professional and business services added 44,000 net new jobs in the month. Manufacturing added 19,000. Healthcare added 15,000 net new jobs but the pace of addition declined to half from the year ago month.
Average hourly earnings increased two cents in October to $24.10 following a three cents increase in September. And, average weekly hours for all private-sector employees remained at 34.40 hours.
In a separate survey conducted by the Labor Department that included furloughed government employees showed unemployment rate increased to 7.3% from 7.2%.