Dow Surges 747 Points on Job Data Today
Stocks surged on Friday, Jan. 4, after the U.S. added 312,000 jobs to payrolls in December, smashing economists’ estimates, and after Federal Reserve Chairman Jerome Powell said the central bank would be “patient” when it comes to raising interest rates as it monitors incoming data.
The Dow Jones Industrial Average jumped 747 points, or 3.3%, to 23,433, the S&P 500 gained 3.4%, and the Nasdaq was up 4.3% as tech shares soared. The rebound followed a drubbing for U.S. stocks on Thursday after a sales warning from Apple Inc. (AAPL – Get Report) and a weak report on U.S. manufacturing. The Dow on Thursday fell 660 points, or 2.83%, to 22,686, the S&P sank 2.48% and the Nasdaq dropped more than 3%.
Stocks started strong out of the gate, helped by another upbeat employment report, which saw the U.S. add 312,000 jobs last month, with upward revisions for previous months. “The jobs report released today was strong across the board,” writes The Conference Board’s Gad Levanon, who believes this is the latest stat to show that it’s too soon to talk about a recession. “While we do expect some slowdown in the US economy and labor market, this jobs report should boost confidence in the US economy.”
Powell also said he wouldn’t resign if asked to by Donald Trump, who has criticized the central bank for raising U.S. interest rates too quickly.
Robust U.S. jobs growth last year in the U.S. continued apace in December, even amid signs the economy has been slowing as Donald Trump’s trade war with China takes a toll on both countries and the stimulus fades from U.S. tax cuts in late 2017.
The nonfarm payrolls jump to 312,000 in December was well above economists’ estimates of 180,000 jobs. The December pace was double the 155,000 jobs added in November, and also above the average 206,000 per month created during all of 2018.
In a surprise, the unemployment rate rose to 3.9%, climbing from a half-century low of 3.7%. Average hourly wages also rose to an annual rate of 3.2%.
The jobs growth could provide a jolt to a U.S. stock market that declined in 2018 and has floundered in the first few trading days of the new year.
