The big news last week was Friday’s January payroll report. The Labor Department announced a better-than-expected 243,000 rise in payroll jobs — over 100,000 better than the economists’ consensus estimate of 140,000. The private sector added a net 257,000 jobs — the largest increase in private-sector payrolls since last April. Meanwhile, the government sector shed another 14,000 jobs — another positive trend — and the overall jobless rate fell to 8.3%, the lowest rate since the first full month of Barack Obama’s presidency.
Overall, the January payroll report was simply stunning. For instance, the beleaguered manufacturing sector added a very healthy 50,000 jobs. Also, the total of new jobs for November and December was revised higher by 60,000, while aggregate wages increased 0.4% in January and personal income rose 0.5% in December. These numbers should fuel consumption growth and rising consumer sentiment.
In another great jobs report, the Labor Department announced new weekly jobless claims declined by 12,000 to 367,000, and the four-week average of new jobless claims fell to 375,750 — near a four-year low.
Not all of the recent economic news is rosy though. Last Wednesday’s ADP (private sector) jobs report was not as euphoric as Friday’s government report. ADP said “only” 170,000 private-sector jobs were created in January. The most positive aspect of the ADP report was that small businesses created most (95,000) of all new jobs. By contrast, large companies (with over 500 employees) only created 3,000 new jobs, and medium-sized businesses added 72,000 jobs. However, despite the slow growth, what investors should come away with is a much more positive outlook on American jobs.
In other positive economic news, Thomson Reuters reported the 21 big retailers they track posted positive same-store sales growth in January. Big discount retailers, like Costco (NASDAQ:COST) and Big Lots (NYSE:LOT), fared best.
Also setting a positive tone for the stock market, the Purchasing Managers Indices in Asia, India and Germany all turned up. That bodes well for global GDP growth. Any perception of stronger global demand will likely continue to put upward pressure on crude oil and other commodity prices as well.