Dow Jones Today is Unimpressed with Weak Jobs Report
Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.
The Dow Jones Industrial Average is relatively unchanged today, up seven points, to 15,451, at 1:30 p.m. EST, after a weaker than expected private sector jobs report. The S&P 500 was down two points to 1,753.
There are two U.S. economic releases affecting the blue-chip index today.
ADP private sector jobs report
ISM nonmanufacturing PMI
The Automatic Data Processing private sector jobs report showed nonfarm employers added 175,000 jobs in January, lower than analyst expectations of 189,000 jobs and below than December's downward revised 227,000 jobs. ADP had previously estimated the private sector added 238,000 jobs in December.
ADP Change in Nonfarm Payrolls data by YCharts.
The private sector jobs report gives economists an advance idea of how the government's main jobs report will turn out. Analysts expect the Labor Department on Friday to report that the public and private sectors added 190,000 jobs in January, after only adding 74,000 jobs in December. December's weak report was attributed to bad weather affecting jobs and reporting.
US Change in Nonfarm Payrolls data by YCharts.
We will have to wait and see what happens on Friday. Unless the January jobs report is also terrible, which seems unlikely, the basic story of the past few years remains unchanged. The economy continues to add roughly 180,000-200,000 jobs a month, which combined with baby boomers retiring is lowering the unemployment rate faster than many expected. More people with jobs and a lower unemployment rate is good for the economy. The flip side of this is that it may be bad for the market.
The Federal Reserve has been surprised by how fast unemployment has fallen. As such the Fed taper of its economic stimulus has started with unemployment near its target of below 6.5%. With the central bank purchasing fewer long-term assets each month, I expect rates to stay above last year's level and profit growth to be challenged.
So what can an investor do in times like this? It's hard to stay sober while everyone around you is drunk on Fed-stimulus punch, telling you to join in on the fun. My advice: Keep learning, focus on your goals, have an investing plan for the long term, stick to it, and ignore the crowds.
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love.
The article Dow Jones Today is Unimpressed with Weak Jobs Report originally appeared on Fool.com.
Dan Dzombakcan be found on Twitter @DanDzombakor on his Facebook page,DanDzombak. Hehas no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. 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 disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.