In afternoon trade the S&P/ASX 200 Index (ASX: XJO) is on course to end its positive run with a sizeable decline.

At the time of writing the benchmark index is down a disappointing 1.5% to 5,900.8 points.

What is weighing on the market today?

While U.S. futures pointing to declines on Wall Street tonight are certainly not helping matters, today’s share market weakness could also be related to Australia’s rising unemployment levels.  

This morning the Australian Bureau of Statistics (ABS) released its jobs data and revealed another sharp rise in unemployment.

According to the release, Australia lost a further 227,700 jobs in May. This brought the total number of unemployed people to a sizeable 927,000. Which means that the unemployment rate has now risen to 7.1%, compared to 6.4% in April and 5.2% in March.

The head of labour statistics at the ABS, Bjorn Jarvis, commented: “The drop in employment, of close to a quarter of a million people, added to the 600,000 in April, brings the total fall to 835,000 people since March.”

What about monthly hours worked?

The unemployment rate doesn’t necessarily show the full extent of the disruption caused by the pandemic.

The ABS data also shows that monthly hours worked fell a further 0.7% in May. This means they are now down 10.2% since March after April’s data was revised up to a 9.5% decline.

Mr Jarvis explained: “The ABS estimates that a combined group of around 2.3 million people – around 1 in 5 employed people – were affected by either job loss between April and May or had less hours than usual for economic reasons in May.”

One small positive was that the underemployment rate decreased by 0.7 percentage points in May to 13.1%. However, this still remains 4.3 points above the March reading.

This means that the underutilisation rate, which combines the unemployment and underemployment rates, climbed to a new record high of 20.2% in May.

“Women continued to be more adversely affected by the labour market deterioration than men. Younger workers have also been particularly impacted,” said Mr Jarvis.

More reading

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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The Domino’s Pizza Enterprises Ltd. (ASX: DMP) share price has proved to be fairly resilient during the coronavirus crisis. Domino’s shares dropped as low as $41.66  in the early phase of the pandemic to be now trading back at $64.11. 

Domino’s felt less of an impact than other global fast-food restaurant chains and stores who were required to close and are only now beginning to re-open.

So, does the Domino’s share price offer value to investors right now?

Getting back on track as coronavirus restrictions ease

Domino’s most recent market update was in late April. It revealed that Australian store sales had been generally consistent prior to the crisis, with a small impact on local trading conditions. France, which one of the worst-hit European countries during the early phase of the crisis, had begun re-opening its stores. New Zealand stores have also re-opened and stores in Japan and Germany were able to maintain strong sales growth during the worst of the crisis.

Domino’s had a key advantage over other fast food restaurant chains during the crisis as it doesn’t typically offer patrons a sit-down service. In addition, in-store pick-ups tend to be fast as they are optimised with an online ordering app with accurate pick-up times. Dominos also does a lot of home deliveries compared to other fast-food chains.

This last update from Domino’s was 2 months ago. With lockdown restrictions easing in its operating markets, I think that trading conditions have likely picked up further.

Medium-term growth outlook

Domino’s did not provide any short-term guidance in its April update. However, it’s anticipating solid growth over the medium term. It forecasts new store openings to be in the range of 7% to 9% per year and store sales growth to be between 3% to 6% per year.

So, are Domino’s shares in the buy zone right now?

The Domino’s share price regained all its losses during the early phases of the pandemic. It is also trading close to 12-month highs, so it’s not cheap from a short-term perspective. However, it’s important to note that it is currently trading well below its all-time peak in mid-2016.

I believe there’s strong potential for Domino’s shares to increase over the next 5 years through growing sales and a strong pipeline of future store openings.

So, despite some possible short-term headwinds due to the coronavirus, I believe its share price is a buy right now.

More reading

• 2 ASX shares to buy for beginners
• UBS picks the best ASX retail stocks for the post COVID-19 world
• Investing $1,000 into these ASX 200 shares could be a smart move
• Top brokers name 3 ASX 200 shares to sell next week
• 3 five-star ASX shares I would buy today

Motley Fool contributor Phil Harpur owns shares of Domino’s Pizza Enterprises Limited. The Motley Fool Australia has recommended Domino’s Pizza Enterprises Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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