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By Jennifer Yousfi
The U.S. Labor Department announced that the jobless rate reached 5.1%, but the markets held their own after the news to end narrowly mixed.
"[U.S. Federal Reserve] Chairman Bernanke implied that there is a strong possibility of a negative first and second quarter of 2008," Dr. Robert Sweet, an economist with MTB Investment Advisors, the investment advisory subsidiary of M&T Bank Corp. (MTB), said in a Money Morning interview.
"[Friday's] employment numbers confirm this possibility," Sweet added.
At Friday's close in New York, the blue-chip Dow Jones Industrial Average Index was down 16.61 points (-0.13%), to close at 12,609.42. The tech-laden Nasdaq Composite Index increased 7.68 points (0.32%), to reach 2,370.98. And the broader Standard & Poor's 500 Index rose 1.09 points (0.08%), to hit 1,370.40.
Payrolls declined for the third straight month as U.S. employers shed 80,000 jobs, more than forecast, the Labor Department announced Friday. Unemployment increased in March to 5.1% from 4.8% last month and is now at its highest level since September 2005.
"After three consecutive months of job losses, it is hard to argue that we are not in a recession," Joel Naroff, president and chief economist of Naroff Economic Advisors said in a note to clients sent after the report was released.
But market response to the news was subdued, as investors seem inclined to wait for first quarter earnings reports.
"The market is reacting well to what two months ago would have been disastrous news, but that may change after next week, when we get news from corporate America and what they think for the rest of the year – we may see some estimate guide-downs," Art Hogan, chief market strategist at Jefferies & Co., told MarketWatch.
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