Jobs Report Preview: Mediocre Jobs News Could Calm Markets - KiiiTV.com South Texas, Corpus Christi, Coastal Bend

Jobs Report Preview: Mediocre Jobs News Could Calm Markets

Posted: Updated:

NEW YORK (CNNMoney) - Analysts are expecting yet another mediocre jobs report this month, which could be just the thing to soothe volatile stock prices and interest rate swings of the last few weeks.

Friday's jobs report is expected to show the economy added 155,000 positions in June, according to economists polled by CNNMoney. The unemployment rate is expected to fall to 7.5%.

Those are not stellar numbers -- the unemployment rate is still above historic norms and job growth is slightly below even the lackluster 176,000 average of the 12 months.

This month's jobs report is being particularly scrutinized in light of the big swings in stock prices and interest rates following comments from Federal Reserve Chairman Ben Bernanke. Bernanke said the Fed could soon stop buying bonds and mortgages -- a strategy it has used for the last several years to keep interest rates low and prop up the economy.

The S&P 500 is down nearly 3% since May 22, when Bernanke said the Fed may curtail its stimulus program later this year, and about half a percent since June 22, when he said the stimulus program could end altogether if unemployment hits 7% -- which the Fed expects by the middle of next year.

Bond yields have spiked on the news, resulting in a corresponding rise in interest rates. Mortgage rates have jumped a whole percentage point since May.

Analysts said any jobs number too much higher than predicted could lead the Federal Reserve to end its stimulus program even sooner, causing the stock market to sell off and interest rates to spike further.

"I'd love to get to the point in the market where good news is good news," said Art Hogan, a managing director at Lazard Capital Markets. "But I just don't think we're there yet."

Conversely, any number below 100,000 or so will signal the economy is on the skids, also causing stocks to sell off.

Economists base their lukewarm job growth predictions on the mixed bag of economic news over the last month.

Consumer confidence is up, as is at least one measure of manufacturing activity. But gross domestic product estimates for the first quarter of 2013 were revised sharply lower in June.

"Companies were likely cautious in hiring during June, with uncertainty about future strength in orders and sales and concerns about the prospect of rising health care premiums," said Lynn Reaser, chief economist at the Fermanian Business and Economy Institute at Point Loma Nazarene University.

Government jobs are expected to decline, as effects from the mandatory spending cuts -- a.k.a. the sequester -- continue to be felt.

Economists also warned that Friday's jobs number may be particularly weak due to difficulty in counting teachers leaving the workplace for the summer and recent graduates entering it.

  • Update: 5 Workers Arrested During Banquete Game Room Bust

    Update: 5 Workers Arrested During Banquete Game Room Bust

    Saturday, April 19 2014 11:00 PM EDT2014-04-20 03:00:15 GMT
    Another game room bust, this one happening in Banquete late Friday night. The Nueces County Sheriff's Office raided two game rooms and both of them were packed with players. The sheriff's office had under cover officers look into two game rooms, one in Banquete and the other just south of Robstown. Not only is it alleged that the game room paying out money, but the game room in Banquete was also a fire trap since there was only one way in and one way out. The Banquete game room had been ...More >>
    Another game room bust, this one happening in Banquete late Friday night. The Nueces County Sheriff's Office raided two game rooms and both of them were packed with players. The sheriff's office had under cover officers look into two game rooms, one in Banquete and the other just south of Robstown. Not only is it alleged that the game room paying out money, but the game room in Banquete was also a fire trap since there was only one way in and one way out. The Banquete game room had been ...More >>
  • Residents Startled by Gun Fire

    Residents Startled by Gun Fire

    Saturday, April 19 2014 10:45 PM EDT2014-04-20 02:45:09 GMT
    Residents woke up to the sound of gun shots in one westside neighborhood Saturday morning. The incident happened just before 2:30 Saturday morning at a home near the intersection of Cortez and Baldwin Boulevard. Police later told 3 News that one man was arrested, but only for public intoxication. Police say the man put up a struggle with officers.More >>
    Residents woke up to the sound of gun shots in one westside neighborhood Saturday morning. The incident happened just before 2:30 Saturday morning at a home near the intersection of Cortez and Baldwin Boulevard. Police later told 3 News that one man was arrested, but only for public intoxication. Police say the man put up a struggle with officers.More >>
  • Car Crashes and Catches Fire

    Car Crashes and Catches Fire

    Saturday, April 19 2014 10:30 PM EDT2014-04-20 02:30:09 GMT
    A driver loses control and crashes in between two barriers under the freeway. It happened at the Greenwood turn around and SPID earlier Saturday afternoon. CCPD says that the driver was speeding when he made the turn and lost control, getting stuck between the two barriers. Police say the impact caused the car to catch fire. The driver was not injured. He was given a ticket and the car will be impounded, that's because the driver did not have insurance.More >>
    A driver loses control and crashes in between two barriers under the freeway. It happened at the Greenwood turn around and SPID earlier Saturday afternoon. CCPD says that the driver was speeding when he made the turn and lost control, getting stuck between the two barriers. Police say the impact caused the car to catch fire. The driver was not injured. He was given a ticket and the car will be impounded, that's because the driver did not have insurance.More >>
Powered by WorldNow
All content © Copyright 2000 - 2014 WorldNow and KIII. All Rights Reserved.
For more information on this site, please read our Privacy Policy and Terms of Service.