We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating indiv idual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
The long-awaited May nonfarm payrolls survey from the U.S. Bureau of Labor Statistics (BLS) is out this morning, and it’s provided a big surprise on at least two levels: a headline of 339K jobs were filled last month, close to double the expected 190K, and the strongest monthly labor figure since January’s 472K. We’re now averaging 314K new jobs per month in 2023. The Unemployment Rate rises 20 basis points (bps) to 3.7% from 3.4% posted a month ago.
April’s tally was revised up by another +39K positions filled, while March numbers are down to 217K from the originally posted 236K. The last time we saw a higher Unemployment Rate was back in February of 2022; we matched this 3.7% last October. And while this may seem, at a glance, that higher jobs totals are at odds with higher unemployment figures, keep in mind these things can happen, particularly when more Americans (re)enter the workforce.
That said, Labor Force Participation stayed pat at 62.6% — the third-straight month at this level, which is also the cycle high. The Average Workweek ticked down to 34.3 hours, while the U-6 (aka “real unemployment”) reached 6.7% for the month — half way between the 6.8% high and 6.6% low we’ve seen this cycle. Lots of numbers here, some of which may be augmented on future revisions, but nothing to indicate the labor force is anything but remaining healthy.
By industry, we see a big discrepancy from yesterday’s private-sector payroll report from ADP ADP, where the Leisure & Hospitality sector reportedly brought in more than 200K new jobs last month. The BLS figure is 48K for Leisure & Hospitality, which came in fewer than Professional & Businesses Services (64K), Government (56K) and Healthcare (52K). The ADP and BLS numbers rarely align in real time; usually modifications over time bring their narratives more consistent with one another.
Finally, Hourly Wages came in as expected at +0.3% — down, thankfully, from the unrevised +0.5% reported a month ago. In February we saw cycle lows of 0.0%, so today’s number is right in between. This is where the inflation concerns exist in the labor market: higher wage increases. Year over year, this figure comes down to +4.3% from a downwardly revised +4.4% for April. If there’s anything in this jobs data that will keep the Fed considering its pause in interest rate hikes mid-month, its that wage increases are moderating.
Pre-market trading is sanguine at this hour. The Dow was registering +136 points directly prior to the BLS report; it’s +204 points now. The S&P 500 went from +18 points to +23 points, and the Nasdaq — easily the best-performing index for the past week, month and year — has ticked down from +69 to +62 points. Passage of as debt-ceiling deal may indicate something of a relief rally, and currently it does not look as if market participants are pricing in another Fed rate hike. There are worse developments; we’ll take the win for now.
We cover more than 1,000 of the most widely followed stocks in our Equity Research Reports. Each report features independent research from our analysts and provides in-depth analysis on a company, its fundamentals and its growth prospects. Quickly access reports for New Upgrades and New Downgrades.
You can also find a report on the ticker of your choice, or access all of the stock reports covered by Zacks analysts.
Recovering air traffic trends should boost TransDigm's footprint in the commercial aerospace market. Expansionary defense budget will aid its defense business.
Wix benefits from the launch of several user-friendly applications. Massive growth in e-commerce along with its sound liquidity and cash flow bodes well for Wix.
U.S. Steel is well-placed to benefit from the favorable steel industry conditions. Actions to improve cost structure, the Big River investment and a strong liquidity position also work in its favor.
Strength in the Energy Systems, Motive Power and Specialty segments is supporting EnerSys’ growth. Sound capital-allocation policy adds to its attractiveness.
Mounting costs, mainly higher compensation and marketing costs, will hurt profitability to an extent. Deteriorating asset quality and rising provisions are the major concerns for Credit Acceptance.
Markdowns to optimize inventory levels within overstock categories and elevated promotional environment have been hurting margins. Also, stiff competition in the industry is a headwind.
Hibbett’s fiscal Q1 results were hurt by inflation, job losses, higher interest rates and weak consumer confidence. As a result, it lowered its fiscal 2024 view.
Higher natural gas costs are expected to weigh on the company's margins. Ammonia production is also expected to remain under pressure. The company also faces logistics issues.
Mounting costs, as the company continues to digitize operations, are likely to hurt Zions’ bottom line. Loan concentration, high debt level and worsening macroeconomic backdrop are other headwinds.
Gilead' strong HIV franchise should help the company maintain momentum. Newly launched products should continue to perform well, thereby driving top-line growth.
Netflix’s growing subscriber base, driven by content strength, focus on originals across various genres and languages, rapid international expansion and partnerships with telcos are key drivers.
Broadcom is a leading player in the semiconductor market based on its expanding product portfolio, multiple target markets, accretive acquisitions and strong cash flow.
Central Garden & Pet has been advancing digital capabilities, optimizing supply chain, expanding data analytics capability and focusing on marketing activities to better engage with customers.
Align Technology’s robust product line, balanced growth across all channels and consistent focus on international markets to drive growth bolster our confidence in the stock.