The Latest U.S. Jobs Report: What Investors Need to Know

What's happening in the headlines can affect you as an investor. Here's what's going on, what you need to know, and what you should do.

The cold, hard facts
The official U.S. government jobs report for October is in, and Reuters is reporting the numbers as follows:

  • The private sector added 104,000 jobs, less than hoped for.
  • The government reduced its labor force by 24,000.
  • Nonfarm payrolls rose by 80,000, missing economists' expectations of 95,000.
  • The unemployment rate edged down slightly, from 9.1% to 9.0%.

Some context
Overall, U.S. employers hired fewer workers in October, but the jobless rate hit a six-month low. Good news. Also heartening, employment figures for August and September were revised upward to show 102,000 more jobs than previously reported.

Also in the good news department, the 0.01% drop in the unemployment rate came even as more people entered the workforce. And the average workweek held steady at 34.3 hours, while average hourly earnings rose $0.05.

"It's not a game-changer, but when you take into account the upward revision to prior months and the drop in the unemployment rate, it's a step in the right direction,'' John Canally, an economist at LPL Financial in New York, told Reuters.

What you should do
Strangely, all the major stock indexes are down so far today on the news:

  • The Dow (INDEX: ^DJI) lost 124 points.
  • The S&P 500 (NYS: SPY) shed 15 points.
  • The Nasdaq (INDEX: ^IXIC) is off by 28 points.

Why the glumness on the Street when the jobs report, while mixed, is cause for guarded optimism? One word: Europe. Greece's recent shenanigans in the handling of its bailout package is still causing investor unease. And with Prime Minister George Papandreou's government teetering on the brink of collapse, the country is still sweaty dynamite and everybody knows it.

Economic indicators, including GDP growth, are slowly, but steadily, moving in the right direction. So as long as the companies you own have sound fundamentals, hang on for what will continue to be a bumpy ride.

One last bit of advice. If you're not currently in any big bank stocks, including Bank of America (NYS: BAC) and Citigroup (NYS: C) , now's not the time to buy. Bank balance sheets are notoriously less transparent than we as investors would like them to be, giving good reason to be wary of their possible exposure to European debt.

Keep track of what's happening with the stocks and the major indices mentioned here by adding them to My Watchlist, a free service of The Motley Fool that lets you easily keep up with everything on your investing radar.

At the time this article was published Fool contributor and newshound John Grgurich loves his Reuters feed so much he wants to marry it, but he owns no shares of any of the companies mentioned above. The Motley Fool owns shares of Bank of America and Citigroup. The Motley Fool has sold shares of SPDR S&P 500 short. Motley Fool newsletter services have recommended buying shares of Automatic Data Processing. 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. The Motley Fool has a scintillating disclosure policy.

Copyright © 1995 - 2011 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story