2023-07-07 19:09:42
The US economy added 209,000 jobs in June
US stocks fell on Friday, as a slightly weaker-than-expected June jobs report failed to quell fears that the Federal Reserve may start raising interest rates once more.
The Dow Jones Industrial Average lost 48 points, or 0.1%. The Standard & Poor’s Index fell 0.1%, while the Nasdaq Composite Index hovered near the flat line.
The Labor Department report for June showed a smaller-than-expected payroll increase, and growth slowed from May. Nonfarm payrolls increased by 209 thousand jobs, while the unemployment rate came in at 3.6%, down from 3.7% in May. Economists polled by Dow Jones expected an increase of 240,000 jobs and a similar level of unemployment.
Portions of the report may give the Fed reason to resume tightening later this month. The closely watched wage numbers came in slightly stronger than expected, with average hourly earnings rising 0.4% in June and 4.4% from a year ago.
“The weaker-than-expected jobs data on top of the headlines was not supported by some of the other data in the report,” Peter Cheer of Academic Securities wrote in a note.
He added: It was a mixed enough report that the Fed might probably go 25 basis points at the next meeting, but we don’t need to price in much more than that.
After the data, traders are holding onto their bets that the Fed will resume tightening later this month. Traders are expecting a 92% chance that the central bank will raise a quarter point on July 26, regarding the same odds as there was a day earlier, according to CME Group’s FeedWatch tool. Policy makers noted at their meeting in June that “two more interest rate hikes might be ahead in 2023.”
Friday’s moves follow Thursday’s ADP data, where the report showed that private sector employers added 497,000 jobs in June, far exceeding the estimate of 220,000 economists polled by Dow Jones.
The EDP results raised concerns regarding the Fed’s next steps. Bond yields rose during regular trading Thursday, with the two-year Treasury rate, the most sensitive to central bank policy, touching its highest level since 2007.
European stocks
European stock markets rose on Friday, following sharp declines in the previous session. The pan-European Stoxx 600 index gained 0.2% in followingnoon trading, as sectors recorded a mix of marginal gains and declines. Utilities stocks recorded the biggest losses, down 0.8%, while chemicals stocks rose 1.3%.
The British FTSE 100 index fell 0.27% to 7,260.86 points. As for the German “DAX” index, it rose by 0.32% to 15,577.56 points, and the French “CAC 40” index increased by 0.45%, to 7,114.35 points.
New economic data from the United States led to a gloomy session that slipped further into the red, and the Stoxx 600 index ended the session down 2.5%. All sectors were in negative territory, with Travel & Leisure down 4% and Retail stocks down 3.7%.
Strong US jobs data pushed two-year Treasury yields to a 16-year high, following figures indicated the Federal Reserve may have more fiscal tightening in the pipeline.
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