U.S. Unemployment Rate at 9.1%; Net New Jobs 103,000

Devan Biswas
07 Oct, 2011
New York City

U.S. stocks gained after employers added 103,000 jobs in September and chain stores retail sales increased at a faster pace. Unemployment rate was steady at 9.1% and public sector trimmed 35,000 jobs. J.C. Penney guided flat comparable same store sales in the third quarter.

[R]11:45 AM New York – U.S. stocks gained after employers added 103,000 jobs in September and chain stores retail sales increased at a faster pace. Unemployment rate was steady at 9.1% and public sector trimmed 35,000 jobs. J.C. Penney guided flat comparable same store sales in the third quarter.[/R]

U.S. stocks advanced in the early trading after employers added net new jobs of 103,000 in September. Long term unemployed continues to drive the jobs market trend.

Labor Department revised the job additions in August to 57,000 from zero as education and healthcare sector increased payrolls. Unemployment rate held steady at 9.1% according to a separate survey by the government agency.

Of the total 14 million people unemployed, 6.2 million have been looking for work longer than six months. Total unemployment rate that includes people who are working part time and cannot find full time work increased to 16.5%.

The larger than expected increase in monthly jobs increase was welcome by the market but the gains in temporary jobs, that lead the hiring of full-time employees were smaller than expected.

The private sector added 137,000 net new jobs in September and the public sector jobs were trimmed 35,000. Public sector education eliminated 24,400 jobs in the month and nearly 300,000 jobs in education have been lost since 2008.

Stocks were also higher in the early trading after retailers reported better than expected comparable same store sales in September. The important back-to-school sales month showed sales increase of 5.1%.

Luxury retailers like Nordstrom reported same-store sales increased 10.7% and Saks Fifth Avenue sales rose 9.3%. However, J.C. Penney same-store sales in the month declined 0.6%. Domestic comparable sales excluding gasoline at Costco increased 7%.

Bank Recap Talks Lift European Markets

European indexes gained on Friday on the hopes that politicians will follow through after providing a vocal support for banks bailout and take concrete steps in containing Greek debt crisis from spreading.

Talks of coordinated actions among various European agencies and the IMF to recapitalize banks stabilized the markets for the second day in a row but markets are still awaiting concrete actions.

The European Central Bank also offered loans to struggling banks and extended the loan period to one year from six months. The move is also expected to provide higher liquidity to banks as the U.S. money market funds restrict lending to European banks.

However, France and Germany are in disagreement in how the EFSF should be used. France wants to tap the €400 billion rescue fund to support its banks and Germany, Holland and other smaller nations are insisting that the fund should be accessed only as a last resort.

Stock Movers

Express Scripts, Inc. ((ESRX)) slipped 3.1% or $1.25 to $38.76 after the healthcare facilities provider revised annual guidance and now expects adjusted earnings per share will be in the range of $2.95 to $3.05 for 2011 earlier it was of $3.15 to $3.25.

J. C. Penney Company, Inc. ((JCP)) increased 1.4% or 41 cents to $28.83 after the department store operator said due to weaker than anticipated sales in first two months of the quarter the company now expects comparable store sales for third quarter will be approximately flat to last year.