Feb. 02-- Wall Street rallied behind strong January jobs figures yesterday as both the Dow Jones industrial average (DJIA) and S&P 500 closed at their highest levels in more than five years.
Still, last month's addition of an estimated 157,000 jobs pales in comparison to revised numbers for November and December, experts said.
"We're treading water. This is better than drowning, but we're not making a lot of headway," said Ken Kuttner, an economics professor at Williams College. "In contrast to the GDP reports, we're not losing ground, but we're not gaining much ground either."
The unemployment rate even ticked up a tenth of a point to 7.9 percent. Revised figures show an additional 127,000 combined jobs were added to the economy in the past two months of 2012, bringing November and December's tallies to 247,000 and 196,000, respectively.
Construction employment rose by 28,000. Since reaching a low two years ago, the sector has grown by 296,000 jobs, a third of which came in the past four months.
The Dow closed at 14,009.79, while the S&P 500 closed at 1,513.17, just 52 points away from its all-time record of 1,565. Yesterday was just the 10th time the Dow has closed above 14,000. The first was in July 2007; the rest were in October of that year. The Dow reached its all-time record, 14,164.53, on Oct. 9, 2007.
But lackluster fourth-quarter growth blamed on defense spending cuts and businesses not replenishing inventories also shows the economy is still recovering at a slow to moderate pace, said Elliot Winer, chief economist at Northeast Analyst Group, who called the January figures "a vanilla report."
"It's not a flatline. We're not flattening out growth," he said. "We're still growing but at the same pace, or technically a little slower pace."
However, Christine Armstrong, senior vice president at Morgan Stanley, said consumer confidence is on the rise again as China makes major efforts to stimulate its economy; a Eurozone breakup becomes less likely; and the housing market continues to bloom.
"We're coming back and we're coming back with a smile right now," she said. "The 14,000 is just an arbitrary number, but it's an emotional number. People are really excited about it."
(c)2013 the Boston Herald
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