Skip to: Content
Skip to: Site Navigation
Skip to: Search

Stock market volatility: Dow jumps on jobs report, plunges, then rises again

Stock market gains early Friday morning were wiped out by noon, before another rally ensued. A better-than-expected jobs report gave some analysts hope that another recession could be averted.

(Page 2 of 2)

On the opposite side of the political fence, in a statement, House Speaker John Boehner said the July jobs numbers show “Washington spending, taxing and regulating is devastating our economy.”

Skip to next paragraph

In some past recessions, one of the leading indicators is the temp job industry, points out Roy Krause, CEO of SFN Group, a major supplier of temp labor, based in Ft. Lauderdale, Fla. For example, prior to the Great Recession, the temp job industry contracted for over a year before the economy actually was officially declared in a downturn. That is because businesses often lay-off their temporary workers before they give pink slips to their permanent staff.

“That is not what is happening now,” says Mr. Krause, adding the industry is still growing at about 7 percent. Last month the industry added 3,000 jobs, after dropping 11,600 in June.

Krause says he is optimistic because corporate profits are still strong, companies have large stockpiles of cash, and they are buying back their own stock because they view it as a good investment. Last month, the Department of Labor says private business added 154,000 new jobs.

In fact, Krause says it appears business is not shelving its normal plans to add workers in the third and fourth quarters for back-to-school sales and holiday sales. “Maybe they won’t be expanding or growing as fast,” he says. “But, with economic growth at 1.5 percent to 2 percent, we’re not in a recession.

Over the past year, the health-care sector has remained one of the brighter segments, adding 299,000 jobs, according to the Department of Labor. Last month, health and personal care stores added 9,000 positions as part of a gain of 26,000 retail jobs in July.

In July, as the auto industry recovered from a part shortage due to the earthquake and tsunami in Japan, it also increased employment, adding some 24,000 positions at a time when it would normally be seasonally reducing its workforce, according to the Department of Labor.

However, the government sector remained a drag on the jobs market with a net reduction of 37,000 jobs. However, that should improve next month since 23,000 of those jobs were due to the shutdown of the Minnesota government, which is now back at work.

Related video:


Read Comments

View reader comments | Comment on this story