Stock futures fluctuate after gov’t hiring by private employers falls short of forecasts

Stock futures fluctuate after weak jobs report

NEW YORK — The stock market appeared headed toward a flat opening Friday following a third straight disappointing report on the labor market.

Stock index futures gave up modest gains and fluctuated after the government said private employers increased their hiring slightly last month, but not as fast as expected. Interest rates fell slightly after the weak jobs data.

The Labor Department said private employers added 83,000 jobs last month. That’s less than the 112,000 economists had forecast private employers would add. On Wednesday, payroll company ADP’s monthly report on private employment also fell short of expectations, helping to send stocks lower.

Investors have focused on private employment in recent months because headline numbers have been skewed by the hiring and firing of temporary census workers. Also, private workers account for the bulk of the country’s labor force.

The government cut 225,000 census jobs in June. Overall, 125,000 workers lost their jobs last month, worse than the 110,000 forecast by economists polled by Thomson Reuters.

Traders have been concerned in recent weeks that the pace of the economic recovery is not as quick as they had hoped. That’s primarily because of the weak labor market. High unemployment has kept consumers’ confidence low and retail sales from growing rapidly. Consumer spending accounts for the largest portion of the nation’s economic activity. Until employers accelerate the pace of hiring, the economy is expected to grow only modestly.

The unemployment rate did fall unexpectedly, dropping to 9.5 percent. Economists polled by Thomson Reuters had forecast it to rise to 9.8 percent. The unemployment rate is calculated from different statistics than the net job cuts, which is why the unemployment rate can fall even if more people lose jobs in a month.

Ahead of the opening bell, Dow Jones industrial average futures fell 1, or less than 0.1 percent, to 9,661. Standard & Poor’s 500 index futures rose 0.20, or less than 0.1 percent, to 1,022.00, while Nasdaq 100 index futures rose 1.25, or 0.1 percent, to 1,729.25.

Pessimism has been growing among investors in recent days about the health of the jobs market and economy as a whole. The Standard & Poor’s 500 index has fallen the last two days after the surprising ADP report and an unexpected rise in initial jobless claims. The S&P 500 is down in eight of the last nine trading sessions, falling 8.1 percent during that time.

Meanwhile, prices rose in the Treasury market Friday after the jobs report, a further indication that investors remain unsure about the health of the economy and are looking for safe investments.

The yield on the 10-year note, which moves opposite its price, fell to 2.93 percent from 2.95 percent late Thursday. Its yield is used as a benchmark for interest rates on many consumer loans and mortgages.

Overseas, Britain’s FTSE 100 rose 0.5 percent, Germany’s DAX index gained 0.1 percent, and France’s CAC-40 rose 0.9 percent. Japan’s Nikkei stock average rose 0.1 percent.