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LIVE MARKETS-Wall Street likes strong December jobs data

Reuters · 01/06/2023 10:31
LIVE MARKETS-Wall Street likes strong December jobs data

All three major U.S. stock indexes green; Dow leads

Energy leads S&P sectors higher, healthcare drags

Crude, gold higher; dollar, bitcoin down

U.S. 10-Year Treasury yield drops to ~3.62%

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WALL STREET LIKES STRONG DECEMBER JOBS DATA (1030 ET/ 1430 GMT)

Wall Street on Friday took comfort in decelerating wage growth in a jobs report for December that showed a strong labor market that could lead the Federal Reserve to err on the side of caution and keep interest rates higher for longer.

Energy .SPNY and consumer staples .SPLRCS led the S&P 500 sectors higher, while healthcare .SPXHC was the sole percentage decliner.

Dow industrials and the benchmark S&P 500 gained, but the Nasdaq posted lower gains as the spector of higher rates somewhat dampened the appeal of growth stocks.

Federal funds futures showed rates fell below 5% for June and were at 4.53% in December. The likelihood the Fed will raise rates by 50 basis points on Feb. 1 remained high at 75%. FEDWATCH.

The data offered investors the chance to pick what they liked, or what Jason Pride, chief investment officer at Glenmede in Philadelphia, called a "choose-your-own-adventure" report.

The deceleration in average hourly earnings lines up with slowing consumer price index reports of recent months, but the jobs market is still too tight and hints that the wage growth slowdown may be sustainable, Pride said.

Worker pay is failing to keep up with the rise in prices at the consumer level, creating a source of stress on household budgets, said Mark Hamrick, senior economic analyst at Bankrate.

"How that equation unfolds in the months ahead will be key, including whether inflation pressures relent," he said.

Quincy Krosby, chief global strategist at LPL Financial in Charlottesville, Virginia said the labor report helps underpin the Fed's goal to moderate the ability of workers to demand higher wages. Small business owners have been reporting demand for higher wages has eased, she said in a .

The Dow Jones Industrial Average .DJI rose 0.99%, the S&P 500 .SPX gained 0.99% and the Nasdaq Composite .IXIC added 0.74%.

Here's a snapshot of market prices:



(Herbert Lash)

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WALL ST FUTURES JUMP ON SLOWING U.S. WAGE DATA (0915 ET/ 1315 GMT)

Stock index futures jumped on Friday as data showed the U.S. labor market remained strong in December but the decline in average hourly earnings pointed to less pressure on inflation and hope the Federal Reserve can ease its interest rate hikes.

Nonfarm payrolls increased 223,000 last month, the Labor Department said, but average hourly earnings rose 0.3% after a 0.4% increase the prior month. That lowered the year-on-year increase in wages to 4.6% from 4.8% in November.

While wage growth is running above the Fed's inflation target of 2%, it's less hot than before. But wages are keeping up with rising consumer prices, pointing to difficulty for the economy and how the Fed reacts to the data.

E-mini futures for the S&P 500 EScv1 rose 0.88%.


(Herbert Lash)

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