U.S. Economy Adds 517,000 Jobs in January, Unemployment Rate Falls to 50-Year Low
By January saw the U.S. economy add a total of 517,000 jobs, far beyond the estimated 187,000 predicted by economists, resulting in an unemployment rate of 3.4% – the lowest it has been since 1969. Hourly earnings increased by an average of 0.3%, which was predicted.[0]
Friday's U.S. Labor Department report showed the U.S. economy added 517,000 jobs in January, far exceeding estimates of 187,000 new jobs. Wage growth dropped to 4.4%, its lowest level since August 2021, while the unemployment rate fell to a 50-year low of 3.4%.[1]
The better-than-expected jobs report has shifted the odds of two more rate hikes by the Federal Reserve in March and May.[2] Fed Chair Jerome Powell also sounded upbeat about a soft landing for the U.S. economy and expressed no qualms about easing financial conditions.[3]
The major stock indexes, however, closed lower Friday.[4] The Dow Jones Industrial Average lost 0.4%, and the S&P 500 moved down 0.8%.[5] The Nasdaq composite, which is heavily invested in technology, declined by 0.9% due to losses in Alphabet, Amazon, and Apple.[6]
The yield on the 10-year Treasury Bond rose 12 basis points to 3.52%.[4]
The Nasdaq Composite dropped 193.86 points, amounting to a 1.6% decrease, closing at 12,006.95.[7]
Investors will also be closely watching January's nonfarm payrolls, due out from the U.S. Bureau of Labor Statistics at 8:30 a.m.[6] Friday evening[8]
Amazon reported higher-than-anticipated sales during the fourth quarter, but its profits were not as good as expected due to the heavy losses it suffered from its investment in Rivian Automotive, an electric vehicle manufacturer.[1] Amazon's AWS cloud unit saw a growth of over 20% from the same period in 2022, although it did not meet anticipations.[1]
QCOM experienced a drop of more than 3% in pre-market trading after their Q1 results revealed a mixture of results and their Q2 guidance was in line with expectations.[9]
The Bank of England (BOE) raised its bank rate by 50 bp to 4.00% and said it sees a shorter, shallower recession than its November outlook.[10]
The 10-Year Treasury rate in the United States has dropped by 0.12%, and is currently at 3.394%.[9]
In conclusion, the U.S.[4]
0. “Dow down modestly, Nasdaq falls sharply after blowout U.S. jobs report, disappointing corporate earnings” MarketWatch, 3 Feb. 2023, https://www.marketwatch.com/story/u-s-stock-futures-tumble-ahead-of-jobs-data-with-tech-under-pressure-as-apple-amazon-and-alphabet-fall-after-results-11675422809
1. “Stock market news live updates: Stocks slide after jobs report shocks, Big Tech results disappoint” Yahoo News, 3 Feb. 2023, https://news.yahoo.com/stock-market-news-live-updates-february-3-2023-122332716.html
2. “Stock Market News Today: Dow Slides 200 Points After Strong Jobs Report” The Wall Street Journal, 3 Feb. 2023, https://www.wsj.com/livecoverage/stock-market-news-today-02-03-2023
3. “Market Rally Powers Higher On Tame Fed, Meta: Weekly Review” Investor's Business Daily, 3 Feb. 2023, https://www.investors.com/news/market-rally-powers-higher-on-tame-fed-meta-earnings-apple-google-amazon/
4. “Stock Market News Today – Stocks Fall after Strong Labor Report Scares Bulls” TipRanks, 3 Feb. 2023, https://www.tipranks.com/news/stock-market-news-today-u-s-futures-plunge-on-weak-tech-results
5. “Dow Jones Futures Fall As Apple, Google, Amazon Skid, Jobs Report Looms; Market Rally Due For Pullback …” Investor's Business Daily, 3 Feb. 2023, https://www.investors.com/market-trend/stock-market-today/dow-jones-futures-apple-google-amazon-skid-jobs-report-looms-market-rally-due-for-pullback/
6. “Stocks fall on Friday, but S&P 500 notches winning week as strong 2023 continues” CNBC, 3 Feb. 2023, https://www.cnbc.com/2023/02/02/stock-futures-fall-after-earnings-reports-from-apple-alphabet-disappoint-investors.html
7. “S&P 500, Dow, Nasdaq slump as job gains raise Fed worries (SP500)” Seeking Alpha, 3 Feb. 2023, https://seekingalpha.com/news/3932039-sp-500-dow-nasdaq-slump-as-job-gains-raise-fed-worries
8. “After This Week's Fed Rate Hike, Jobs Number Surprise And Key Earnings Reports, What's Next For The Marke” Benzinga, 3 Feb. 2023, https://www.benzinga.com/top-stories/23/02/30713561/after-this-weeks-fed-rate-hike-jobs-number-surprise-and-key-earnings-reports-whats-next-for-the-mark
9. “Stocks Plunge Before The Open As Big Tech Earnings Disappoint, U.S. Payrolls Data In Focus” Barchart, 3 Feb. 2023, https://www.barchart.com/story/news/13873602/stocks-plunge-before-the-open-as-big-tech-earnings-disappoint-u-s-payrolls-data-in-focus
10. “US stocks close lower but still higher on the week” ForexLive, 3 Feb. 2023, https://www.forexlive.com/technical-analysis/us-stocks-close-lower-but-still-higher-on-the-week-20230203/
