U.S. Job Growth Machine Sputters, Europe Struggles with Deflation

Nichole Harper
02 Oct, 2015
New York City

Stocks on Wall Street edged lower after weaker-than-expected new job additions in September and August. Jobless rate in September held at 5.1% in September. Wholesale price index in the euro zone declined more than expected. Monetary base in Japan accelerated at a faster pace in September.

[R][1[2:40 PM New York City, New York – Stocks on Wall Street edged lower after weaker-than-expected new job additions in September and August. Jobless rate in September held at 5.1% in September. Wholesale price index in the euro zone declined more than expected. Monetary base in Japan accelerated at a faster pace in September.[/R]

The weaker than expected increase in new job additions in September surprised investors and August data was revised sharply lower.

U.S. non-farm payroll employment in September rose 142,000 and the unemployment rate held at 5.1% from August, the Department of Labor said.

In addition, August data was revised sharply lower 136,000 as employers slowed new positions in two months outside of farming sector.

New orders for manufactured goods in August declined $8.2 billion or 1.7% to $473 billion, followed by 0.2% increase in July.

Excluding transportation, new orders decreased 0.8%, the Department of Commerce reported.

On Wall Street, Tollbooth Strategy Index fell 51.35 or 0.5% to 10,122.32.

S&P 500 index slid 3.58 or 0.2% to 1,920.31 and the Nasdaq Composite Index edged up 0.24 to 4,627.39.

Crude oil in New York slipped 61 cents to $44.13 a barrel and gold surged $23.91 to $1,137.52 an ounce.

U.S. Movers

American Electric Power Co Inc ((AEP)) slid 1 cent to $56.14 after the electricity producer agreed to sell its commercial barge transportation subsidiary, AEP River Operations LLC, to American Commercial Lines owned by Platinum Equity for about $550 million.

The transaction is expected to close in the fourth-quarter of this year.

Delta Air Lines, Inc ((DAL)) slumped 3% or $1.36 to $44.05 after the airline said passengers’ unit revenue in September declined 5%.

The airline also reported that it estimated an operating margin for the third-quarter in the range of 20% to 21% and unit revenues to slump between 4.5% and 5.5%.

For the quarter, Delta projected that it paid for jet fuel between $1.80 and $1.85 per gallon, 5% decrease from a year ago period.

T-Mobile US Inc ((TMUS)) declined 3.1% or $1.26 to $38.87 after the communication services provider’s confirmed they lost crucial data of about 15 million consumers as a result of a data breach at credit reporting agency Experian.

T-Mobile said the breach was discovered on September 15 and the company was noticed about a week later.

The U.K.-based credit-reporting agency Experian Plc said the loss was the result of an unauthorized access to a server with T-Mobile customer data and ""no other clients'' data was accessed.""

European Markets

In the euro area industrial producer price index in August fell 0.8% and 0.9% in the wider region of EU28.

In July, prices slid 0.2% in the euro area and 0.3% in the wider region of EU28, the Statistical Office of the European Communities said.

In London trading, FTSE 100 index jumped 93.32 or 1.5% to 6,057.71 and in Frankfurt the DAX index slipped 75.11 or 0.8% to 9,436.18.

In Paris, CAC 40 index fell 29.56 or 0.7% to 4,396.44.

For the week, FTSE 100 index rose 0.3% and the DAX index dropped 1.4% and the CAC 40 index slipped 0.6%.

Carl Zeiss Meditec AG soared 4.5% to €25.60 after the Germany-based surgical equipments maker lifted revenues forecast for the year to jump 14% to €1.04 billion compared to previous guidance of about €960 million.

Paragon Group of Co Plc surged 9.3% to 431.60 pence after the U.K.-based mortgage lender agreed to acquire privately held Five Arrows Leasing Group Limited, an asset-based leasing services provider from Rothschild & Co for about £117 million.

Asian Markets

Nikkei average in Tokyo closed nearly unchanged and rose 0.9% after a week of volatile trading. Seasonally adjusted jobless rate rose was unchanged in August at 3.4%.

Stocks in Tokyo closed nearly unchanged after a week of volatile trading and for the week the Nikkei average increased 0.9%.

On the economic front, the monetary base in September jumped 35.1% to 332.19 trillion yen followed by 33.3% increase in August and the adjusted monetary base in the month surged 46.3% to 332.51 trillion yen, the Bank of Japan said.

The average of household spending in August jumped 2.9% to 291,156 yen after 0.2% drop in July and the average monthly income per household increased 2.2% to 475,369 yen.

But the average of consumption expenditures per household rose 3.4% to 317,195 yen, the Ministry of Internal Affairs and Communications said.

Separately, the ministry said the seasonally adjusted unemployment rate in August was unchanged from the previous month at 3.4%.

The number of unemployed persons declined 2.6% to 2.25 million from a year ago month.

The Nikkei 225 Stock Average edged up 2.71 to 17,725.13 and the broader Topix index added 2.18 to 1,444.92.

The yen strengthened to 119.99 against a dollar.

Aeon Co Ltd jumped 2.1% to 1,959 yen after the Nikkei newspaper reported supermarkets and convenience stores operator’s revenue for the first-half ending in August to soar 20% to 4 trillion yen and operating profit to jump 70% to 72 billion yen or $600 million.

Sompo Japan Nipponkoa Holdings Inc rose 0.3% to 3,529 yen after the property and casualty insurance company plans to acquire Tokyo-based smaller rival Watami no Kaigo Co, a nursing care unit of pub and restaurant chain operator for about 21 billion yen.