The thirty-stock Dow Jones Industrial Average began trading above 14,000 Friday, as the Bureau of Labor Statistics released the January unemployment figure putting the unemployment rate at 7.9 percent.
The last time the Dow traded at such heights was days before the 2007 Wall Street financial collapse.
While the unemployment rate increased one point from December, non-farm payrolls rose by 157,000. Simultaneously, consumer sentiment, measured by Thomson Reuters/University of Michigan, rose from 72.9 in December to 73.8 in January, beating the economist forecasts of 71.5
Positive news for manufacturing also came Friday.
“The gains we’ve received on the January jobs report are the start of positive readings for the foreseeable future,” said Todd Schoenberger, managing partner at LandColt Capital. “The first quarter has historically delivered surprises to the upside anyway, so expect January revisions and February-March readings to be significantly positive.”
The BLS also released the revised numbers for previous months, showing added jobs during both November and December.
“The market certainly likes it,” Liz Ann Sonders, chief investment strategist at Charles Schwab, said to CNBC. The revisions “may be the real bright spot of the report.”
This comes after it was announced that gross domestic product actually shrank o.1 percent during the fourth quarter of 2012.
“This report and the fact that GDP was negative in the 4th quarter confirms just how weak the economy has stayed under President Obama’s watch,” House Ways and Means Committee Chairman David Camp said in a statement. “Congress and the President owe it to the more than 12 million unemployed looking for work in this country to engage in this important effort.”
The news is unlikely to change the Federal Reserve’s monetary policy or boost confidence in the economic recovery.
Taking into account discouraged workers who have dropped out of the labor force entirely and people forced to work part-time put the unemployment rate at 14.4 percent, unchanged from last month.
“Since workers are required to look for jobs to get benefits, it appears that many of the unemployed stopped looking for work when their benefits expired and therefore are no longer counted as unemployed,” the Center for Economic Policy Research reports.
The average work week remained unchanged at 34.4 hours, while wages rose four cents to $23.78, a 2.1 percent gain over the past year.
“When you look at January in and of itself you do not see the strength you would like to see at this point,” said Steve Blitz, chief economist at ITG. “However, chances are January gets revised upward, you have to wait another month unfortunately. It’s kind of an in-between month in that regard.”
Some 12.3 million workers remain unemployed, the BLS reports.
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