The US stock market today hit five-year high. On Friday, it created a record, as Labour Department reports suggest that the employment, manufacturing and housing grew modestly in the country in the month of January.
Each of the three major indexes went up by at least one per cent.
The Dow Jones industrial average .DJI gained 139.22 points, or 1.00 percent, to 13,999.80. The Standard & Poor’s 500 Index .SPX rose 15.04 points, or 1.00 percent, to 1,513.15. The Nasdaq Composite Index .IXIC advanced 35.47 points, or 1.13 percent, to 3,177.60.
The dollar advanced against the yen and Treasury debt prices traded higher as the rise in the unemployment rate suggested the Federal Reserve would maintain its easy monetary policy stance.
Though the Gross Domestic Product contracted at a 0.1 per cent annual rate in the fourth quarter employment grew modestly in the first month of 2013.
Besides, gains in the prior two months were bigger than initially reported. Despite a surprise contraction in output––may be because of super-storm in late October––in the final three months of 2012, the economy is on the way to recovery.
Factory activity in the country hit a nine-month high in January on strong new order growth and consumer confidence increased.
According to the Labour Department report released on Friday employers added 157,000 jobs to their payrolls last month and there were 127,000 more jobs created in November and December than previously reported.
Average hourly earnings increased by four cents in January. They were up 2.1 per cent in the 12 months through January.
Yet, the unemployment rate went slightly up by 0.1 percentage point to touch 7.9 per cent––it was 10 per cent in October 2009.
The Institute for Supply Management said its index of national factory activity rose to 53.1 last month, the highest level since April, from 50.2 in December. Thus manufacturing will continue to support the economy.
Experts are of the view that the fourth quarter economy was actually good underneath the surface. Had super-storm not caused devastation it would have improved a lot.
Interestingly, all the job gains in January were in the private sector, where hiring was as broad-based as it was in December and declines in public sector employment remained moderate.
As the housing market gains momentum construction jobs are expected to rise further. Housing is expected to support the economy this year, taking over the manufacturing sector.
Within the vast private services sector, retail jobs increased by a solid 32,600 jobs after rising 11,200 in December. Retail employment has now risen for seven straight months.
The payrolls in education and health increased by 25,000 jobs in January after employment grew by the most in 10 months in December.
On the other hand government payrolls dropped by 9,000 last month after falling 6,000 in December. The pace is moderating as local government layoffs, outside education, subside.
The length of the workweek for the average worker was steady at 34.4 hours for a third straight month.