Stocks May Open Higher As Traders Digest Jobs Report - U.S. Commentary

(RTTNews) - Stocks futures have pulled back off their highs following the release of the monthly jobs report but currently continue to point to a higher open for the markets on Friday. The Dow futures are up by 33 points, while the Nasdaq futures are up by 8.75 points.

The Labor Department recently released a report showing that U.S. employment rose by much less than expected in the month of December, although the report also showed an unexpected drop in the unemployment rate.

The report said non-farm payroll employment edged up by 74,000 jobs in December following an upwardly revised increase of 241,000 jobs in November.

Economists had been expecting employment to increase by about 200,000 jobs compared to the addition of 203,000 jobs originally reported for the previous month.

Despite the weaker than expected job growth, the unemployment rate dropped to 6.7 percent in December from 7.0 percent in November. The decline pulled the rate down to its lowest level since October of 2008.

While the drop in the unemployment rate came as a surprise to economists, the decline was largely due to a decrease in the size of the civilian labor force.

Rob Carnell, chief international economist at ING, said, "In short, the figures look too inconsistent with other data to be taken too literally."

"We have become used to smaller fluctuations in payrolls in recent years, but we suspect that much of the weakness of this month's figures will turn out to be simply noise, and will be reversed in the months ahead," he added.

The report may generate some uncertainty about the outlook for the Federal Reserve's stimulus program, with the weak job growth raising questions about whether the central bank will continue to scale back its asset purchases.

With traders looking ahead to the release of the closely watched monthly jobs report, stocks turned in another lackluster performance during trading on Thursday before closing roughly flat.

The major averages ended the day mixed for the second consecutive session. While the S&P 500 inched up 0.64 points or less than a tenth of a percent to 1,838.13, the Dow edged down 17.98 points or 0.1 percent to 16,444.76 and the Nasdaq dipped 9.42 points or 0.2 percent to 4,156.19.