U.S. Labor Market Continues to Show Strength
By Economists had anticipated an increase of 187,000 jobs in the United States economy during January, however, 517,000 jobs were added to the total, pushing the unemployment rate down to 3.4%, its lowest since 1969. Hourly earnings increased by an average of 0.3%, as predicted.[0]
The Labor Department reported that the U.S. economy added 517,000 jobs last month, and the unemployment rate fell to 3.4%, its lowest since 1969. This figure easily topped the Dow Jones consensus forecast of 187,000, and was up from the 260,000 jobs added in December.[1]
The yields have[2] The US10Y 10-year Treasury yield rose 15 basis points to 3.54%, while the US2Y 2-year yield increased 20 basis points to 4.29%.[3] The U.S. dollar index (DXY) also increased by 0.6%.[2]
Moreover, the market is pricing in a higher chance of a higher Fed Funds rate for June 2023.[3] The market’s expectations for a rate in the range of 5% to 5.25% increased to 53.7% compared to yesterday’s expectations of 31.9%.[3]
The Nasdaq Composite decreased by 193.86 points, or 1.6%, closing at 12,006.95.[0] The S&P 500 (^GSPC) declined by 1%, and the Dow Jones Industrial Average (^DJI) fell around 130 points, representing a 0.4% decrease[4]
The U.S. Bureau of Labor Statistics is set to release the nonfarm payrolls for January at 8:30 a.m., and investors will be paying close attention.[3] Friday[5]
New Labor Department data showed that first-time jobless claims for the week ended Feb 3 fell to 183,000 vs. 186,000 in the previous week.[6] Analysts expected them to rise to 193,000, indicating a strong labor market.
In conclusion, the U.S. labor market continues to show strength, with the unemployment rate declining to its lowest level since 1969, and first-time jobless claims coming in much lower than expected for a second week in a row. This is expected to have a positive impact on the Federal Reserve's interest rate policies and the stock market.
0. “U.S. stocks fall after blowout jobs report, disappointing earnings, but Nasdaq books longest weekly win streak since November 2021” 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. “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
2. “Nasdaq, S&P, and Dow pare some losses after payrolls data release settles in” Seeking Alpha, 3 Feb. 2023, https://seekingalpha.com/news/3931742-nasdaq-sp-futures-fall-as-tech-surge-stumbles-payrolls-on-tap
3. “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
4. “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
5. “In a Week Full of Surprises, This Was the Market's Biggest” RealMoney, 3 Feb. 2023, https://realmoney.thestreet.com/investing/stocks/in-a-week-full-of-surprises-this-was-the-market-s-biggest-16115236
6. “Tech Stocks Surge on Interest Rate Optimism and Strength in Meta Platforms” Barchart, 2 Feb. 2023, https://www.barchart.com/story/news/13855473/tech-stocks-surge-on-interest-rate-optimism-and-strength-in-meta-platforms
