Investors went all in yesterday as a series of jobs report -- and a glimmer of hope for Europe -- sent stock prices soaring. The Dow Industrials added 244 points to the highest close since Dec. 28, 2007, at 13,292. The Nasdaq composite finished the session at its best level since Nov. 15, 2000. However, the celebration, may be short-lived as the Labor Department report this morning shows a slow rise in job creation. The report said payrolls in August rose by just 96,000, well below expectations and far below the ADP survey yesterday that showed civilian payrolls were up by 201,000. Even worse, the Labor Department revised the June and July reports lower by 41,000 jobs. Interestingly, the nation's unemployment rate declined to 8.1 percent as fewer people were counted in the labor market.
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The question, of course, is whether this disappointing news will force the hand of Ben Bernanke and the Federal Reserve at its meeting next week. They meet on Wednesday and Thursday with the official statement due out at about 11:15 a.m. Pacific time on Thursday. It would be hard to imagine any circumstance that would prevent the Fed from some type of easing or stimulus to keep the economy out of recession.
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The Bloomberg Consumer Comfort Index, which measures how people feel about the economy, their own personal finances and if they think this is a good time to buy needed goods or services, was little changed in the past week and continues to hover near an eight-month low. "Despite very aggressive discounting from retailers, households remain quite pessimistic on the state of the economy and their own personal finances," said Joseph Brusuelas of Bloomberg.
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Despite the miserable employment report the financial markets are stable in early trading today. One actively traded stock today is Google, up more than $8 to $708, its first move above $700 since December 2007.
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Wal-Mart is testing a new service called "Scan & Go," which allows people to select items while they move around the store and scan them with their iPhone. Then, when they are finished shopping, simply wave their phone in front of a checkout device and the process is completed immediately, a receipt is issued and you're out the door. The idea, of course, is to speed up the checkout process -- never enjoyable at a Walmart store -- and reduce labor costs. This appears to be a preview of the way many people will be shopping and paying in the near future.
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CNBC's Rick Santelli tried yesterday to explain to people what a big number a trillion is. With politicians throwing around a billion dollars here, a trillion dollars there, it often seems there is little difference between the two. He came up with some eye-opening examples of $1 trillion. For instance, if you spent $1 a second it would take 31,546 years to spend $1 trillion. One trillion is also the weight of all the people in the world combined. And, One trillion bricks would allow you to recreate the Great Wall of China -- 258 times!
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