New York (CNN Business)The jobs recovery may be losing steam. But the unemployment rate continued to fall, and workers are still bringing home bigger paychecks. Investors seem to be pleased by that.
Stocks were flat to slightly higher Friday morning after the US government reported that just 199,000 jobs were added in December. The Dow was up about 15 points in early trading after opening slightly lower. The S&P 500 rose 0.2%, and the Nasdaq gained 0.4%.
Although the headline jobs numbers were disappointing, the government also said that wages rose 4.7% over the past 12 months. That could bode well for consumer spending, even as it may also be raising fears that the Federal Reserve will step up plans to raise rates in order to fight inflation.
This jobs report doubled expectations
The market tumbled Wednesday after minutes from the Fed’s latest meeting last month showed that some central bankers were growing increasingly nervous about inflation.
Wall Street interpreted that to be a sign that the Fed may raise short-term rates more aggressively this year than originally expected.
However, the mixed jobs numbers may lead the Fed to only gradually raise rates this year. If that’s the case, corporate earnings growth should remain relatively strong, and the economy likely will continue to post solid gains.
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