What the job market means for your investments

7:06 AM, Jun 12, 2013   |    comments
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GOLDEN VALLEY, Minn. - Hiring is on the rise in the U-S..
The labor department says total hiring jumped nearly 5% in April.

At the same time, the number of people quitting their jobs increased more than 7%, and more people are re-entering the job market, after sitting on the sidelines.

Experts say these are signs of a dynamic job market.
So why would that be bad news for your 401k?

Financial advisor, Dan Ament with Morgan Stanley in Wayzata explained on KARE 11 Sunrise.

May Jobs Report Highlights:

U.S. Employers added 175,000 - beating expectations for an increase of 169,000.

Unemployment rate rose to 7.6% - from 7.5%

"U-6" Unemployment rate 14.5% - when including the unemployed members of the workforce who are no longer looking for work and those desiring full time but presently working part-time, the U-6 unemployment rate still stands at 14.5%. This compares to a rate of 8.3% in 2007. More than four million people have been out of work for more than six months and over 11 million in total are looking for work.

Will the Fed begin to taper its support? This is the question weighing on economists and investors trying to assess the timing and what impact it will have economically AND on the capital markets.

Bond and stock market reactions - Global financial markets have seen increased volatility this week as investors fretted that the U.S. Federal Reserve and other major central banks would soon move to cut back on the money they have been pumping into their economies. Stocks aren't the only worry, bonds have felt the pinch as well reacting to the 10 yr U.S. Treasury rate moving from about 1.60% to 2.25% in the past five weeks, representing a price decline of approximately 7.7%. For those holding government bonds, rising rates is analogous to a falling stock market.

 

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