Pimco’s Mather Says Markets Overreacting to Weak Jobs Report

  • Friday’s report is ‘return to a normal payroll number’
  • Says typical for jobs growth to slow as full employment nears

Markets are overreacting to the weak jobs report in May, said Scott Mather, who co-manages the $86 billion Pimco Total Return Fund at Pacific Investment Management Co.

"It looks like a bit of an overreaction," Mather said Friday on Bloomberg Radio. "This is something we observe every month based on one number, and we know it’s volatile. We should think about today as finally a return to a normal payroll number."

Mather said that as the economy returns to full employment, it is normal for jobs growth to slow and wages to rise. Employers in May added the fewest number of workers in almost six years. The addition of 38,000 workers, the fewest since September 2010, followed a 123,000 advance in April that was smaller than previously estimated, a Labor Department report showed Friday.

Jeffrey Rosenberg, BlackRock’s chief investment strategist for fixed income, also said investors are overreacting to the report. Speaking on Bloomberg Television, he said the low number was partly due to the strike at Verizon Communications Inc. and the impact of weather.

U.S. stocks fell with the dollar, while Treasuries and gold rallied after the release of the report.