C Dec. 31, U.S. and European stock indexes rose noticeably (SP 2%, DJIA 1.8%, Nasdaq 2.1%, FTSE 2.2%, DAX 1.3%), while weekly increase SP 500 was a record for the last 2 months. This is due to positive data on industrial activity in the U.S. (the December ISM Manufacturing peaked in April 2006) and retail sales (according to Retail Metrics, sales in the open less than a year ago, American stores increased in December by 3% with the expected decline of 1% ). Meanwhile, data on the labor market were mixed. If a preliminary report on the reduction of ADP jobs in the private sector in December and weekly applications for unemployment benefits were generally better than expected, the most significant record of the Labor Ministry, published on Friday, had to disappoint those who hoped for a speedy recovery and the labor market in the U.S. . He captures the unexpected loss of employment (-85 thousand zero change, the anticipated market) and the persistence of unemployment at 10% only because of "retouching" in the method of calculation (in December, the labor force decreased by 661 thousand people. At the expense of the former unemployed who desperately to find a job, and the calculations of experts, without the influence of this factor, unemployment would rise last month from 10.1% to 10.4%). The level of "underuse" of labor resources, which many see as a more complete measure of unemployment exceeds 17% and continues to grow, and the average duration of job search (29.1 week) reached a record since the beginning of settlement in 1948
Weak data on the labor market have not prevented American indexes opened lower on Friday, turn up and complete the trading day in positive territory. After all, they have increased expectations of maintaining extremely low interest rates, at least, in 1P10, and even before the end of the year. Click to continue »