Usually a market day post employment report is very volatile but most traders Thursday seemed to sit on their hands as they awaited the outcome of this weekend’s Greek vote. After opening with a mild gap up, indexes sold off and ended the day with small losses. The S&P 500 fell 0.03% and the NASDAQ 0.08%. The markets will be closed Friday for the holiday.
Greek Prime Minister Alexis Tsipras said in a Dow Jones report the leaders will have a deal 48 hours after the referendum. A survey showed 47 percent leaned toward a “yes” vote on the referendum, an endorsement of austerity and the international bailout. The “no” camp, the government’s position rejecting those terms, was 43 percent. The margin of error in the survey of 1,000 people was 3.1 percentage points. The Greek stock exchange and local banks remained closed for a fourth day in a row on Thursday. Talks between Greece and its international lenders are now postponed until after Sunday’s referendum on the country’s bailout terms.
On first glance the unemployment rate looks great but it was due to a lot of workers leaving the workforce – which is a bad reason. This has been the pattern post Great Recession – tons of people disappearing from the workforce pushing the unemployment rate down. There were also 2 negative revisions downward of prior reports.
American companies kicked off the summer with modest growth in hiring, sending nonfarm payrolls up 223,000 in June, according to Labor Department numbers released Thursday. In addition to the payroll growth, the unemployment rate ticked lower to 5.3 percent from 5.5 percent, due largely to a sharp decline in labor force participation, which fell from 62.9 percent to 62.6 percent, its lowest level since October 1977. 432,000 people dropped out of the labor force. Previous months’ job totals were revised lower by 60,000, with April falling from 221,000 to 187,000 and May declining from 280,000 to 254,000.