A weaker-than-expected reading on employment tempered investor enthusiasm for retail stocks Friday, but the sector still ended the week at levels that, until recently, had not been seen since 2007.
The U.S. added a seasonally adjusted 39,000 jobs last month, far fewer than the 145,000 gain economists had penciled in for the monthly Labor Department report. The unemployment rate, which is calculated separately from payrolls, rose unexpectedly to 9.8 percent from 9.6 percent.
Department stores cut a seasonally adjusted 8,800 positions to employ 1.48 million in November, while specialty retailers trimmed 1,600 jobs to employ 1.4 million.
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Scott Hoyt, senior director of consumer economics for Moody’s Analytics, noted there had been a “decent uptick” in hiring by specialty retailers in October. “Retailers were anecdotally trying to encourage consumers to shift their purchases earlier in the season and they may have matched that with some earlier hiring,” Hoyt said.
The S&P Retail Index slipped 0.22 points, to 507.72 Friday as the Dow Jones Industrial Average inched up 0.2 percent, or 19.68 points, to 11,382.09.
But retail stocks, which are still seen by many as cheap relative to earnings, have been generally gaining on the improving outlook for the holiday season and continued interest from private equity investors looking to take companies private.
For the week, retail stocks gained 2.5 percent as the Dow rose 2.6 percent.
Most international markets were on the rise with the Hang Seng Index leading the way with a 1.9 percent gain in Hong Kong. The DAX increased 1.4 percent in Frankfurt and the FTSE 100 rose 1.4 percent in London as fears of Ireland’s debt troubles ebbed some with a $112 billion bailout package.
Of the 172 stocks tracked by WWD, 116 rose, 4 held steady and 52 fell last week.