Employment data and earnings reports that were released from a number of major companies seemed to both delight and dismay investors at times last week, according to Jason Colodne, co-founder of Colbeck Capital Management, an NYC-based private equity asset management organization focused on strategic lending.
Here’s a look at some of the notable recent events.
Last week involved a fair amount of employment news, with government agencies and private sector companies sharing job-related research.
Bureau of Labor Statistics data released Tuesday indicated overall job openings were relatively flat from November to December — although within certain industries, such as accommodation and food services, job openings increased.
Job hires decreased in December to 6.3 million from 6.7 million in November. The number of quits — generally regarded as employees voluntary initiating their exit from a job — decreased from 4.5 million in November, the highest level on record since the data was first produced in 2000, to 4.3 million in December, with the quits rate, which serves as a measure of workers’ willingness or ability to leave jobs, showing little change at 2.9%.
The number and rate of layoffs and discharges — involuntary separations initiated by the employer — also were relatively similar to their previous levels at 1.2 million and 0.8%, respectively.
ADP’s National Employment Report, released on Wednesday, suggested private sector employment decreased by 301,000 jobs from December to January.
The report, produced in collaboration with Moody’s Analytics, showed small businesses shed the greatest number of jobs, 144,000 — with the service-providing sector, which includes the transportation, trade and utilities, and leisure and hospitality industries, showing a bigger reduction than the goods-producing sector.
Despite widespread concerns about the COVID-19 omicron variant’s impact, the latest BLS jobs data, which the agency shared on Friday morning, revealed employment and the unemployment rate in January hadn’t changed much from the previous month.
Employment rose by 467,000 in January, and the unemployment rate remained fairly steady at 4% — still higher than the 3.5% rate before the pandemic in February 2020, but similar to December’s 3.9% rate.
Year-over-year, the unemployment rate is down by 2.4 percentage points, and the number of unemployed persons declined by 3.7 million.
Omicron did seem to have some effect on the workforce: The share of employed persons who teleworked due to the pandemic increased in January, rising from 11.1% in December to 15.4%. A total of 6 million people also reported they had been unable to work at all or had worked fewer hours because their employer closed or lost business due to the pandemic — a considerable increase from 3.1 million in December.
Recent Market Activity
The S&P 500, Nasdaq Composite and Dow Jones Industrial Average all rose for the first three days of the week as a number of companies — including delivery service provider UPS and Google’s parent company, Alphabet — shared their most recent earnings reports.
Some companies’ stocks declined, such as Facebook, whose estimates for its earnings per share total for the fourth quarter of 2021 and the first quarter of 2022 revenue came in below analysts’ expectations, according to Yahoo News.
The company, now called Meta, said it faces a number of challenges in the current quarter, including advertiser budgets potentially being affected by inflation and supply chain disruptions.
On Monday, the S&P 500 gained more than 1%, and then rose 0.7% on Tuesday and 0.9% on Wednesday. On Thursday, however, the index was down 2.4%, but by late Friday, had gained 0.5%.
The Nasdaq Composite climbed for the first half of the week, gaining 0.7% on Tuesday, following a more than 3% rise on Monday. It continued to escalate on Wednesday, only to plummet on Thursday, shedding 3.7%. On Friday, preliminary data indicated the Nasdaq had gained 1.6%.
The Dow Jones Industrial Average was also up more than 1% on Monday. On Wednesday, the index escalated 0.5%, following a 0.8% rise on Tuesday — however, the Dow also took a dive on Thursday, losing 1.4%. On Friday at close, the Dow initially appeared to [EB1] have declined slightly.
About Jason Colodne
Jason Colodne is the senior transaction partner at Colbeck Capital Management and oversees all aspects of investment execution and portfolio management. Colodne co-founded Colbeck Capital Management as a managing partner in 2009. Colodne’s investment experience spans over two decades.
About Colbeck Capital Management
Colbeck Capital Management (colbeck.com) is a leading, middle-market private credit manager focused on strategic lending. Colbeck partners with companies during periods of transition, providing creative capital solutions. Colbeck sponsors its portfolio companies through consistent engagement with management teams in areas such as finance, capital markets and growth strategies, distinguishing itself from traditional lenders. Founded in 2009 by Jason Colodne and Jason Beckman, the principals have extensive experience investing through different market cycles at leading institutions, including Goldman Sachs and Morgan Stanley.