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07/06/24
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Wall Street Down After Strong Payrolls Report
On Friday, stocks on Wall Street inched down after stronger than expected jobs growth increased fears that U.S. interest rates will stay higher for longer.
The NASDAQ Composite fell 40 points, or 0.2%, the S&P 500 traded 5 points, or 0.1%, lower, and the Dow Jones Industrial Average fell 17 points, or 0.1%.
Last month, the economy in the U.S. added more jobs than anticipated, as nonfarm payrolls in May rose by 272K, surging from the revised lower 165K release in April. Economists had expected a reading of 182K.
This was more than the average monthly increase of 232K over the previous 12 months.
Month-on-month, average hourly earnings rose by 0.4%, up from April’s 0.2% and higher than forecasts of 0.3%. The unemployment rate lifted to 4.0%, higher than the 3.9% expected.
Analysts at Evercore ISI said nearly all metrics were strong to robust as jobs surged, and hourly earnings rose, but the labor force, household employment and the unemployment rate dropped.
A series of other readings this week indicated that the labor market was easing. Initial jobless claims rose, job openings fell, and ADP employment data read lower than anticipated.
Apart from inflation, the labor market is a crucial consideration for the Fed in reducing interest rates.
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