By Carlos Guillen
So far today stocks are trading a bit lower, with the Dow Jones Industrial Average down just over 10 points, but trading has been rather unstable. Friday's jobs data was rather mixed, as the unemployment rate declined better than expected, but nonfarm jobs increments did not cut the mustard.
The latest jobs data certainly served to take away the enthusiasm that had been building this week. According to the latest data from the Department of Labor, the unemployment rate declined in July to 7.4 percent from the 7.6 percent achieved in June, landing lower than the Street's consensus of 7.5 percent and representing the lowest level since December 2008 when the rate was 7.3 percent. However, while this drop in the unemployment rate would normally be considered to be encouraging, the manner in which it was achieved was certainly discouraging as many people simply dropped out of the work force. Also discouraging was that non-farm payroll employment increased by much less than expected.
The household survey showed that while the population increased by 204,000, and 227,000 people found work, 240,000 individuals moved out of the work force. In essence, the decline in the rate was mostly the result of many unemployed moved out of the jobs market.
Clearly the most disappointing aspect of the jobs data was that non-farm payroll employment in July (derived from the establishment survey) increased by much less than expected, and June's level was revised lower. The report showed that the increase in non-farm payrolls was 162,000 while the Street's consensus called for a gain of 175,000. Moreover, the non-farm private payroll gains were 161,000, also landing below economists' forecast of 195,000. This result was also much lower than that presented by ADP this past Wednesday, which actually landed better than the Street estimates. According to ADP, non-farm private sector jobs increased during July by 200,000, higher than economists' average forecast calling for a 175,000 increase.
In all, the July unemployment data appears to be confusing investors as the combination of all these mixed results does not give a clear indication of what to think the Fed will do in terms of tapering moving forward.
By David Urani
Just a friendly reminder, corn price continues to sink ever since late last month the USDA raised its expectations for US production to be the highest since the 1930's. That outlook has been getting better for traders this week as cooler, wetter weather has come around to the plains. Obviously we all eat and corn is the biggest of all the crops, so it's something worth watching.
The droughts last year naturally wreaked havoc on supply, and since touching above $8.00 in August last year prices are now all the way back down to $4.79 per bushel. This is the lowest price since 2010.