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02/08/24
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US Stocks Lower on Weak Jobs Data Fueling Recession Fears
On Friday, U.S. stocks dropped sharply as a much weaker-than-anticipated jobs report fueled fears the U.S. economy may be heading for recession and led to volatility jumping sharply.
The NASDAQ Composite slumped 582 points, or 3.3%, the S&P 500 dropped 126 points, or 2.3% and the Dow Jones Industrial Average fell 752 points, or 1.9%.
The official jobs report for July showed that fewer jobs than expected had been created last month, as nonfarm payrolls rose 114K last month, the lowest since Jan. 2021, and down from June’s revised 179K. Economists had expected the July number to be 177K.
The unemployment rate rose from 4.1% in June to 4.3%, while average hourly wage growth was at 0.2% month-on-month, a decline from 0.3% the prior month.
Capital Economics analysts the sharp slowdown in July payrolls and sharper increase in the unemployment rate made an interest rate cut in September inevitable and would increase speculation that the Fed will start its cutting cycle with a 0.5% cut or even a move between meetings.
The weaker data led to many on Wall Street calling on the Fed to cut rates by 0.5% at the meeting in September.
Early on Friday JPMorgan joined Citi and called for back-to-back 0.5% cuts in Sept. and Nov.
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