Should You Cheer Today's Jobs Report?

Motley Fool Staff
Updated

The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?

What's happening: The U.S. Bureau of Labor Statistics' employment situation report for October showed that 80,000 net jobs were added to the economy during the month. Economists were expecting that the report would show 85,000 added. Private payrolls expanded by 104,000 versus the average estimate of 117,000.

In plain English, please: At first blush, the report looks pretty disappointing. As it was, expectations were for a relatively low number of new jobs considering the level of unemployment. Combine that with the fact that the numbers missed expectations and you have fodder for market disappointment.

However, a closer look reveals something a good deal more optimistic. When releasing monthly jobs data, the BLS also revises its previous months' numbers. In this report, it bumped up new jobs in August from 57,000 to 104,000 and in September from 103,000 to 158,000. To save you the trouble with the math, that's 102,000 additional jobs that we didn't think we had. Not bad!

Stocks to watch: Obviously, the employment picture has very broad implications for the economy as a whole as well as for many individual companies -- particularly those in the consumer space. However, to highlight one particular detail of the jobs report, the leisure and hospitality sector was noted as one of the stronger segments in the economy, as it added 22,000 jobs during the month. It could be worth checking in on companies like McDonald's (NYS: MCD) , International Game Technology (NYS: IGT) , Chipotle (NYS: CMG) , and Wynn Resorts (NAS: WYNN) to see whether stronger hiring means brighter times ahead.

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At the time thisarticle was published The Motley Fool owns shares of Chipotle Mexican Grill and International Game Technology. Motley Fool newsletter services have recommended buying shares of McDonald's and Chipotle Mexican Grill. Motley Fool newsletter services have recommended creating a put butterfly position in Chipotle Mexican Grill. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributor Matt Koppenheffer owns shares of McDonald's, but does not have a financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting his CAPS portfolio, or you can follow Matt on Twitter @KoppTheFool or Facebook. The Fool's disclosure policy prefers dividends over a sharp stick in the eye.

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