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U.S. stocks erase losses after big January jobs number

Published 02/03/2023, 09:41 AM
Updated 02/03/2023, 11:25 AM
© Reuters.
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By Liz Moyer 

Investing.com -- U.S. stocks recovered earlier losses on Friday after surprisingly strong job growth in January.

At 11:22 ET (16:22 GMT), the Dow Jones Industrial Average was up 68 points or 0.2%, while the S&P 500 was down 0.1%, and the NASDAQ Composite was flat. All three indexes started the day falling after the jobs report.

Rather than cooling off, new data out this morning showed the economy added far more jobs than expected in January. The Labor Department said the economy added 517,000 nonfarm payrolls, a reversal of a four-month trend of slowing gains. Analysts were expecting 185,000, the slowest job growth in nearly two years. What’s more, December and November job numbers were both revised upward.

The unemployment rate ticked down 3.4% in January from 3.5% in December rather than ticking up to 3.6% as expected. Joblessness is now at a 53-year low.

The jobs numbers come after the Fed raised interest rates by a quarter of a percentage point on Wednesday, with Chair Jerome Powell signaling the central bank isn't done with rate hikes.

But the market has been betting there is an end in sight. Futures traders mostly agree that there will be another quarter-point hike in March, according to the CME FedWatch tool. But as the Fed gets closer to its target terminal rate somewhere around 5% or just above, it is expected to pause its rate increases.

Earnings are also adding to the market's movement. Alphabet Inc. Class C (NASDAQ:GOOG) shares fell 0.8% after missing expectations. Apple Inc. (NASDAQ:AAPL) stock reversed earlier losses to rise 3.5% after iPhone sales disappointed. Starbucks Corporation (NASDAQ:SBUX) stock fell 2.7% after weak international demand.

 

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