Dow rose 134 for a new record, advancers over decliners better than 4-3 but NAZ fell 87. The MLP index gained 1+ to 175 & the REIT index was steady in the 466s. Junk bond funds did little & Treasuries were heavily sold (more below). Oil slid back to the 68s & gold plunged 44 to 1764.
AMJ (Alerian MLP index tracking fund)
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US employers hired more workers than expected last month as a number of states ended extended unemployment benefits before the Sep expiration. Nonfarm
payrolls increased by 943K workers in Jul while the unemployment rate
fell to 5.4%, the Labor Dept said. The forecast was expecting 870K jobs gained & the unemployment rate to
fall to 5.7% from 5.9%. Jun's reading was revised higher by 88K
jobs to 938K. Notable job gains were seen in leisure & hospitality (+380K),
which saw 2/3 of the jobs gained in food services & drinking
places. Public & private education (+261K), professional &
business services (+60K), transportation & warehousing (+50K)
also saw sizable gains. Construction & wholesale trade were little
changed. The
jobs gains occurred as 3 additional states ended the supplemental
$300 per week in unemployment benefits. A 4th state, Maryland, was
scheduled to end the benefits but was blocked from doing so by a
Baltimore judge. The labor force participation rate was little changed at 61.7% & the rate has held been 61.4-61.7% since Jun 2020. Average
hourly earnings rose 0.4% month over month & 4% annually. The forecast called for respective increases of 0.3% & 3.8%. The US economy has gained 16.7M jobs since Apr 2020 but is down by 5.7M from pre-pandemic levels. As
the economy continues to recover from its COVID-19-induced slowdown,
economists have begun to question the need for the emergency measures
put in place during the early days of the pandemic. The Fed slashed
interest rates to near zero & has been buying Treasuries & other
assets at a pace of $120B per month. The central bank
said at its most recent meeting that it would need to see "substantial
further progress" before beginning the tapering process. Recent
comments from Federal Reserve Board members Richard Clarida &
Christoper Waller indicated a run of strong jobs reports would be
evidence of such progress.
US economy adds 943K jobs in July, blowing past expectations
Senate Minority Leader Mitch McConnell made clear that Reps will not help Dems with the votes to raise the debt ceiling as Congress is grappling with a crucial deadline. McConnell railed against Dems' plans to pass a $3.5T budget reconciliation bill without GOP support. He said if Dems want to go alone on more "reckless" spending, they'll have to raise the debt limit themselves, too. "Let me make something perfectly clear: If they don’t need or want our input, they won’t get our help," McConnell said. "They won’t get our help with the debt limit increase that these reckless plans will require." McConnell said Dems control gov, so the burden is on them to raise the debt limit. "They control the White House, they control the House, they control the Senate," McConnell added. "They can raise the debt ceiling, and if it’s raised, they will do it." Lawmakers already missed a Sat deadline to extend former Pres Trump's 2-year suspension of the nation's borrowing limit, which was automatically reinstated at the beginning of Aug. The debt ceiling, which hit $22T in Aug 2019, is the legal limit on the total amount of debt that the federal gov can borrow on behalf of the public. Once the suspension lifted, the new limit was reinstated around $28.5T, a figure that includes debt held by the public & the gov.
McConnell says GOP won't help Dems with 'reckless' debt plan
Treasury yields climbed higher as the Labor Dept's highly anticipated jobs report came out better than expected. The yield on the benchmark 10-year Treasury note added 7 basis points, rising to 1.287% & the yield on the 30-year Treasury bond rose 7 basis points to 1.932%. Yields move inversely to prices. Despite fears about the spread of the Delta variant of Covid-19, which has rattled bonds & equities in recent weeks, hiring for the month of Jul increased, the Labor Dept reported. The economy added 943K nonfarm payrolls & the unemployment rate dropped to 5.4%, according to the dep's Bureau of Labor Statistics. The forecast called the US economy to have added 845K jobs & 5.7% unemployment. Average hourly earnings also increased more than expected, rising 0.4% for the month. Employment data is key to the Federal Reserve's decision to pare back its bond buying program, beginning the process of tightening its easy monetary policies more broadly & acting as a precursor to the raising of interest rates. Fed Chair Jerome Powell has signaled to the markets that the central bank may wait until Nov to formally announce when tapering will begin.
Treasury yields shoot higher after unemployment rate falls to 5.4%
Dow Jones Industrials
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