Mixed pre-markets amid strong employment data in July and poor second quarter results
US equity futures were mixed despite strong job creation in July. The Ministry of Labor has indicated that Non-farm payroll in July stood at 943,000 from the consensus estimate of 854,000. In addition, job creation in June was revised up to 938,000 from the 850,000 reported earlier.
Job creation in July was a major relief for market players after very disappointing data on the private sector wage bill. Private payroll firm ADP ADP reported only 330,000 jobs created in the economy in July, more than half of the consensus estimate.
Additionally, market watchers are also relieved that the spread of the highly infectious Delta variant of the coronavirus has not disrupted the labor market recovery. In addition, it appears that the early termination of unemployment benefits in several states may force some workers to return to the labor market.
the Unemployment rate fell to 5.4% in July from 5.9% in June. The consensus estimate was 5.7%. However, despite strong job creation in July, the US economy has to come a long way to reach pre-pandemic levels.
Prior to the release of July employment data, in absolute terms the job shortage was nearly 6.8 million in June compared to the pre-pandemic level. Likewise, the unemployment rate in the pre-pandemic period was around 3.5%.
Average hourly wage rate rose 0.4% in July, in line with upward revised data from the previous month. The consensus estimate was an increase of 0.3%. Year over year, the wage rate increased 4% in July compared to 3.6% in June.
This is because employers have offered higher compensation programs to workers to get out of the problem of labor shortage. Rising wages are primarily responsible for the current inflationary pressure in the US economy.
the Average work week for July was 34.8, in line with revised upward data for June. The participation rate remained stable at 61.7% in July. This measurement is still 1.6% lower than the pre-pandemic level.
Meanwhile, earnings results were mostly weak today. Pioneer of technology Nuance Communications inc. NUAN came out with quarterly earnings of $ 0.16 per share, missing Zacks’ consensus estimate of $ 0.18. The company posted revenue of $ 336.58 million, beating Zacks’ consensus estimate by 0.65%. For more information on NUAN income, click here.
Large electricity supplier Dominion Energy Inc. D came out with a quarterly profit of $ 0.76 a share, missing Zacks’ consensus estimate of $ 0.77. The company posted $ 3.04 billion in revenue, missing Zacks’ consensus estimate by 7.72%. For a detailed discussion of D earnings, click here.
Leading company in digital sports entertainment and games DraftKings Inc. DKNG posted a quarterly loss of $ 0.76 per share, above Zacks’ consensus estimate of a loss of $ 0.61. Revenue was $ 297.61 million, beating Zacks’ consensus estimate by 23.57%. To learn more about DKNG earnings, click here.
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