Pedestrians walk past a Now Hiring sign in Arlington, Virginia, on March 16, 2022.
Stefani Reynolds/AFP/Getty Images
US stocks fell on Friday after July’s strong jobs report showed big gains despite fears of a recession.
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 keep pressure on the Fed to continue with its interest rate hikes.
US stocks fell on Friday as investors digested the implications of a stronger-than-expected July employment report.
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%.
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.
Here’s where US indexes stood shortly after the 9:30 a.m. ET open on Friday:
S&P 500: 4,124.38, down 0.66%
Dow Jones Industrial Average: 32,582.74, down 0.44% (144.08 points)
Nasdaq Composite: 12,595.09, down 0.99%
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 the reconciliation bill. The agreement made Thursday evening between Krysten Sinema and Chuck Schumer scraps the closing of the carried interest tax break, and instead imposes a 1% excise tax on stock buybacks.
Corporate stock buyback programs have long been seen as a big source of demand for US …read more
Source:: Business Insider