Wall Street edged up on Thursday with the release of mixed manufacturing data and ahead of Friday’s nonfarm payroll report that will shed some light on the world’s largest economy’s labor market. The Dow Jones industrial average declined 12.69 points, or 0.08%, to trade at 16,272.01. The S&P 500 index added 3.79 points, or 0.2%, to close the session at 1,923.82 and the Nasdaq Composite rose 6.92 points, or 0.15%, to trade at 4,627.08. San Francisco Federal Reserve President John Williams again called on Thursday for an interest rate hike later this year, citing healthy employment and rising housing prices that may indicate overly excessive optimism. An outside survey by Reuters predict that the nonfarm payroll report will show an addition of 203,000 jobs in September despite concerns that the economic slowdown in China would weaken the U.S. market. Unemployment is expected to remain at 5.1%. However, some economists offer a different view on the matter, claiming that the economy needs only 100,000 added each month in order to keep up with population growth. The over-creation of jobs would lead to a situation in which the jobless rate is pushed to a level low enough to cause a surge in inflation. Despite these concerns, inflation has remained stable with the sharp decline in the jobless rate over the last year. Federal Reserve Chair Janet Yellen has stated that the central bank will hold off on raising interest rates until inflation rises. Currently, inflation is rising at a pace of 0.3% - well below the Federal Reserve’s 2% target.
European benchmarks ended lower on Thursday after initial optimism caused by better-than-expected Chinese factory data was replaced with renewed concern over global economic slowdown. The Chinese report had shown that the manufacturing purchasing managers’ index rose to 49.8 in September, beating previous expectations. The STOXX 600 index fell 1.5% to trade at 346.23 after touching as high as 353.07 before optimism was replaced with concern later in the session. The German DAX 30 ended 1.57% lower to trade at 9,509.24 as the export-heavy index was more easily affected by concerns over global slowdown. The French CAC 40 ended 0.7% lower at 4,426.54 and the British FTSE 100 rose 0.18% to trade at 6,072.47 after erasing early gains. Glencore (LONDON:GLEN) close 0.6% lower despite assurances made by the company that its debt plans are still on track and that John Mack, a well-known banker, will purchase $600,000 worth of Glencore’s stock.
In economic events, two major data releases will occur today. Japanese unemployment data will be released earlier in the session, followed by the highly anticipated U.S. nonfarm payrolls report. The labor market’s condition is one of the top concerns when the Fed considers an interest rate hike, making today’s report of special significance in lieu of the central bank’s plan to raise interest rates this year.