The New York Times is reporting that investors are fleeing the stock market at a sharp pace in response to recent economic news. Wall Street trading took a two percent fall on Wednesday as employers have failed to add jobs to the hiring market at the previously predicted rate. In addition, other factors such as extreme weather have negatively impacted fiscal expectations nationwide. More:
Just ahead of the government’s monthly jobs report for May, investors got a disappointing look at the trend in hiring over the last few weeks. The monthly report from ADP Employer Services, the payroll processing firm, said that private employers added 38,000 jobs in May, lower than expectations and the smallest increase since September 2010.
Economists said that the figure in the ADP survey, far less than the 175,000 jobs that had been forecast, could have been a reflection of severe storms in many parts of the country that month, while automobile manufacturers have temporarily laid off workers in response to a disruption in supply chains. Economists from Capital Economics Ltd. said in a research note that the dip also reflected a slowdown in the growth in the service sector.
Worried investors are funneling their funds into bonds, a much safer investment vehicle, illustrating a lack of faith in the much-touted economic recovery.