It’s All About Jobs

Written by: Steven B. Bouchey

The stock market didn’t need any more reasons to extend the recent volatility but guess what, todays jobs report did just that.

The number of new jobs created was 142,000, well short of the estimated 200,000 jobs.   This could confuse the Fed more as to when should they should raise interest rates. What was worse than missing the September number was the revised jobs number in August at 136,000 down from the originally reported 173,000, a loss of 36,000 jobs. For July the new number of jobs added was 223,000 down from 245,000. The revisions are as important as the reported jobs number each month because it gives a truer reading on just how many jobs were added.

Unemployment held steady at 5.1% and according to the Labor Department, the broader unemployment rate for those who are working part-time or have not looked for a job fell to 10%. The participation rate also fell to 62.4% in September and is the lowest it’s been since October 1977.   The total labor force lost another 350,000 people looking for work. Last but not least, wages stayed the same with no inflationary movement and the average work week slipped slightly to 34.5 hours.

All year the census was that the Fed would raise interest rates in September which has come and gone with no change. With continued mixed reports on the US and Global economies, the Fed may not raise rates at all in 2015.

So what should investors do? The best long-term strategy for most investors is to stay the course and not let bad news headlines or volatility change your strategy. With that being said, during times of volatility, investors should review their portfolios with their financial advisor and make sure that the amount of risk they are talking is suitable. It’s also a good time to buy areas of the market that look to be good value. And for those that have cash waiting to invest in the markets, it’s always better to buy when stocks are on sale than when they are at record highs. You may not catch the bottom of the market but it’s a better entry point now than when the market was at its all-time high.