8/3/18 – Disappointing Jobs Report Doesn’t Hurt Stocks

The Dow was essentially flat while the S&P 500 gained 0.8% in a week that ended with a somewhat disappointing jobs report. The divergence between the indices continues a trend we’ve seen this year where larger companies have lagged small and mid-cap names. Some of that divergence is due to tariffs having an outsized impact on multinational companies, but it’s also typical to see smaller names outperform in a strong economy.

The July jobs report was released this morning and showed the US economy added 157k net new jobs in the month. That was below the 190k consensus estimate and well below the last few months. Prior months were revised higher and the three month average remains a very healthy 224k. Over the year, job growth has averaged 219k/month, the best year since 2015. The unemployment rate remained at 3.9%. Wage growth held steady at 2.7%. Read More

Trucking is one industry being hit hard by a labor shortage. Truck driver is the most common job in roughly two-thirds of US states and yet the industry is currently looking to add 51k new drivers. Companies are starting to offer signing bonuses, loan repayment, enhanced training and other perks to attract new drivers. They are also attempting to recruit more females into the industry. Men make up 94% of all truck drivers, but with the shortage in drivers, more companies are realizing they need to market to all job seekers. The (in)ability of many people to pass a drug test is also hurting the industries’ ability to find qualified drivers. Watch More

Oil declined this week, decreasing 0.5% to close at $68.59/barrel. The yield on the 10-yr Treasury ticked lower, closing at 2.95% from 2.96% last week. The average rate on a 30-yr fixed rate mortgage moved higher to 4.60%, from 4.54% last week.

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