S&P And Nasdaq Close Higher For The Week For Second Week In A Row Stocks ended mixed on Friday, although the Nasdaq put in a new all-time high close in the process. And both the Nasdaq and the S&P finished higher for the week, making it the second week in a row. The main driver on Friday was the Employment Situation Report. Unfortunately, it came in under expectations with 235,000 new jobs in August (243K in the private sector and -8K in the public) vs. the consensus for 740,000 (693K private & 47K public). The unemployment rate did decline to 5.2% from 5.4% as expected. The participation rate stayed the same at 61.7%. It should also be noted that the average hourly earnings rose 0.6% m/m vs. 0.3% expected, and 4.3% y/y vs. 3.9% expected. The large miss wasn't that much of a surprise given the ADP Employment report two days earlier had foreshadowed this with a lower than expected 374K private sector tally vs. expectations for 500K. Analysts point to the delta variant for keeping job growth subdued as that has slowed down the reopening and made some less inclined to return to work, as well as the enhanced unemployment benefits which have further incentivized some people to stay at home.
Although, the latter should soon be removed from the equation as the enhanced unemployment benefits expire in September. So stronger numbers are expected in next month's report and for months to come. The industries with the largest job gains were as follows: Professional & Business Services rose by 74,000; Transportation & Warehousing was up by 53,000; Private Education was up by 40,000 (while declining by -21,000 in state government education, and -6,000 in local government education); Manufacturing jobs rose by 37,000; 'Other Services' (such as personal laundry services, repair and maintenance services, etc.) rose by 37,000; Information Services increased by 17,000; Financial Activities increased by 16,000; and Mining added 6,000.
In other news, the PMI Composite report came in as expected at 55.4, unchanged from last month and in line with expectations. And the ISM Services Index dipped to 61.7 from last month's 64.1 and views for 62.0. Stocks continue to trade at or near their all-time highs. And as long as the economy continues to recover, which it clearly has been, in spite of recent concerns like the delta variant, which have slowed some things down, it looks like there's a lot more upside to go for both the economy and the market. So make sure you're taking full advantage of it. See you tomorrow,  Kevin Matras
Executive Vice President, Zacks Investment Research | 
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