Moneybeat - A rebound on Wall Street

MARY REICHARD, HOST: Coming up next on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: The January jobs report looked more like the big jobs boom of 2018: American employers added 225,000 new jobs last month, and that’s actually better than the 2018 average of 223,000 per month. It’s a 29 percent improvement over last year. And so now for the past four months, we’ve been averaging jobs growth in excess of 200,000.

The headline unemployment rate actually ticked up one tenth to 3.6 percent. But that’s one of those statistical anomalies in economics where a rise in the unemployment rate can be a good thing. The reason for that is that about half a million Americans, who’d not been counted previously, re-entered the job market. Many of them found work and some haven’t yet, but because the overall labor force went up, so, too, did the unemployment rate. 

All that to say, the employment-to-population ratio is now greater than 61 percent for the first time in 11 years. Average hourly pay is up year-on-year 3.1 percent. And a leading indicator on the future health of the job market, new applications for unemployment benefits, achieved the lowest level in 50 years.

REICHARD: On Wall Street, all three of the major stock indexes posted new all-time record highs, and finished the week between 3 and 4 percent higher than the previous week’s close. 

It was the best week for the markets in eight months. 

Last week’s rally put stocks back where they were before the coronavirus outbreak prompted several sessions of panic selling.

But the uncertainty is far from over: In a sign that the market remains uncomfortable, many investors drove stocks down with a big selloff on Friday in order to lock in gains from Thursday’s record-high market, just in case of bad news over the weekend.

EICHER: Federal Reserve chairman Jay Powell testifies to Congress tomorrow and Wednesday. He’ll give his legally required, semi-annual report on monetary policy. And he’s expected to explain the central bank’s view that the downside risks to the economy have lessened, because trade conflicts are better resolved and decreasing global growth has for the most part bottomed out.

The one caveat will be the big unknown in China, and that is the scope and duration of the coronavirus outbreak and, specifically, its economic impact.

REICHARD: The Labor Department last week also reported that worker productivity increased overall 1.7 percent in 2019. That represents a 30 percent jump over the previous year, and it’s the healthiest gain in nine years. In 2017 and ’18, the number was 1.3 percent.

Between the years 2000 and 2007, productivity was twice that, almost 3 percent a year. That was around the time the digital revolution had taken hold and the internet had come into common use in the workplace.

EICHER: Another good sign for the recovering housing market: Mortgage interest has hit its lowest level in three years. The benchmark 30-year-fixed loan fell to 3.45 percent, down almost a full percentage point from a year ago. At the median home price, the difference in mortgage interest makes home buying more affordable by more than $1,300 a year.

And that is today’s Monday Moneybeat.

(AP Photo/Mark Lennihan, File) This Jan. 31, 2020 file photo shows a sign for Wall Street in New York. 

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