Federal Reserve Chairman Jerome Powell appears during a Senate Banking Committee hearing on Capitol Hill in Washington, Tuesday, Nov. 30, 2021.
Andrew Harnik/AP Photo
US stocks closed mixed on Friday after July’s strong jobs report fought back recession worries.
The US added 528,000 new jobs in July, about double expectations as the unemployment rate fell to 3.5%.
The strong employment gains will put pressure on the Fed to continue with its interest rate hikes.
US stocks closed mixed on Friday as investors assessed the catch-22 scenario in which a strong economy likely means more interest rate hikes from the Federal Reserve.
The US economy added 528,000 new jobs in July, which was more than double the consensus economist estimate of 250,000 new jobs. The strong gains were driven in part by the hospitality sector and resulted in the unemployment rate falling to 3.5% from 3.6%.
The US economy has now fully reclaimed all the jobs lost during the COVID-19 pandemic.
While the jobs report is good news for the US economy, as it bucks the idea that a recession is imminent, it also puts pressure on the Federal Reserve to continue with its aggressive interest rate hikes as it attempts to tame inflation. The Fed’s next FOMC meeting where it will determine what to do with interest rates is in late September.
Here’s where US indexes stood at the 4:00 p.m. ET close on Friday:
S&P 500: 4,145.07, down 0.17%
Dow Jones Industrial Average: 32,801.51, up 0.23% (74.69 points)
Nasdaq Composite: 12,657.55, down 0.5%
The July jobs report also showed a better-than-expected gain in average hourly earnings, with a 0.5% increase to $32.17, ahead of estimates for a gain of just 0.3%.
Also putting pressure on stocks was the Democrats’ Inflation Reduction Act, which seems to now have full support of all 50 Senate Democrats needed to pass …read more
Source:: Business Insider