New York: US stocks rose as investors assessed a jobs report that showed continued resilience in hiring but a slowdown in wage gains that could aid the Federal Reserve in its inflation battle.
The S&P 500 jumped more than 1 per cent, buoyed by gains in Apple and Costco Wholesale. The tech-heavy Nasdaq 100 also rose, after dropping earlier in the session. Treasuries advanced, with the policy-sensitive two-year Treasury yield falling to around 4.31 per cent after data showed a US services gauge unexpectedly shrank at the end of 2022. A dollar index dropped.
The December jobs report failed to deliver a clear picture on the state of the American labor market, a day after two jobs readings signaled continued tightness. Hiring exceeded estimates for the month and unemployment fell to the lowest since the 1960s. Traders are mulling how that strength contrasts with the weaker gains in hourly wages and what that means for Fed policy, with swaps markets pricing an increase of between 25 and 50 basis points at the next meeting.
“A new 53-year low in the unemployment rate is a real problem, suggesting the Fed made zero progress toward relieving labor market strain in 2022,” wrote Chris Low, chief economist at FHN Financial. “But the combination of the downward revision to November average hourly earnings and a lower-than-expected December rise buys the FOMC more time.”