[Good Morning Stock Market] "US Employment Data Boost... Expectation of Domestic Market Rise"

[Image source=Yonhap News]

[Asia Economy Reporter Ji-hwan Park] The surprising improvement in U.S. employment indicators, with a sharp increase in new jobs in May and a decline in the unemployment rate, is raising expectations that it will have a positive impact on domestic and international stock markets. On the 5th (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 27,110.98, up 829.16 points (3.15%) from the previous session. The Standard & Poor's (S&P) 500 index rose 81.58 points (2.62%) to 3,193.93, and the tech-heavy Nasdaq index closed at 9,814.08, up 198.27 points (2.06%). The domestic stock market is also expected to start higher, buoyed by the surprising improvement in the U.S. employment report.

◆ Gong Dong-rak, Researcher at Daishin Securities = The U.S. employment indicators for May showed faster-than-expected improvement, raising hopes for economic recovery in the second half of the year. It appears that signs of change have emerged in the previously worsening employment trend. The U.S. Department of Labor reported that the May unemployment rate fell to 13.3% from 14.7% in April. Monthly employment in the U.S. was expected to remain sluggish in May due to worsening ADP data and an increase in weekly unemployment claims. However, with the reopening of the economy, employment increased faster than expected, especially in sectors that had experienced severe job losses, reversing the downward trend. This rapid improvement contrasts with earlier concerns that a time lag before economic normalization was inevitable. However, the sectors showing employment improvement are still concentrated in low-wage industries, and the increase in workers transitioning from temporary layoffs to permanent layoffs or those not returning to work after temporary layoffs raises concerns about the quality of employment. Additionally, the fact that this indicator reflects the effects of policies such as the Paycheck Protection Program (PPP) may cast doubt on the sustainability of future employment improvements.

◆ Seo Sang-young, Researcher at Kiwoom Securities = The domestic stock market is expected to start higher, supported by the surprising improvement in the U.S. employment report. In particular, this raises the possibility of a V-shaped economic recovery, which has been a factor driving index gains. However, considering the errors in the employment report and the detailed components of the indicators, expectations for continued employment improvement are not high, which increases the likelihood of profit-taking selling contrary to market expectations. In fact, as U.S. companies' profit margins continue to be revised downward, it is expected that they will not actively increase fixed expenses (employment).

This content was produced with the assistance of AI translation services.