January’s U.S. jobs reports is stunningly good
A recruitment sign is pictured at a McDonald’s restaurant in Garden Grove, California on July 8, 2022.
Robyn Beck | afp | beautiful pictures
This report is from CNBC Daily Open today, our new international market newsletter. The CNBC Daily Open keeps investors up to date with everything they need to know, wherever they are. Like what you see? You can register This.
What you need to know today
- The US January jobs report was impressive everywhere. Non-Farm Payrolls increase 517,000 won for the month, breaking analysts’ estimate of 187,000. The unemployment rate fell to 3.4%, the lowest since May 1969.
- US stocks, worried about what such a strong jobs report means for the future of interest rates, sharp drop on friday with all indicators registering losses. Asia-Pacific shares mixed friday endingwhen India’s struggling Adani Enterprises group managed to close 1.38% higher.
- Stocks of Amazon succeeded after the company’s earnings report, down 8%. Although both Apple and Alphabet had disappointing fourth quarters, shares of Alphabet fell 2%, while shares of Apple rose 2%.
- PROFESSIONAL The first is Chevron with a $75 billion acquisition. Next, Meta announced its own $40 billion plan. Is this a sign that share buyback will grow more popular in 2023?
During normal economic times – that is, over the past 20 years or so with low inflation, moderate unemployment and slow growth – January’s job numbers should be a reason to celebrate. No matter which angle you look at it, the report sparkles: Employment increased by 517,000 – almost three times what analysts expected. The unemployment rate is 3.4% — the lowest in more than 50 years. Hourly pay increase was 0.3% — steady, but still moderate compared to the rest of the year.
However, the market fell on the news. On Friday, the S&P 500 fell 1.04% to 4,136.48, the Nasdaq Composite lost its hot streak and fell 1.59% and the Dow Jones Industrial Average fell 0.38%. That’s right, the indexes may have reacted to earnings: Apple, Alphabet, and Amazon, combined with a market capitalization of nearly $5 trillion, reported fourth-quarter results with plenty of flaws. than success. Investors’ disappointment was reflected in the companies’ share prices (although it should be noted that Apple’s stock actually rose 2% after an early loss), so this has had an impact. move back the indexes.
However, the most important thing on investors’ minds should definitely be how the jobs report will affect the Federal Reserve’s interest rate trajectory. Central banks have repeatedly emphasized that they are looking at economic data to determine how far the gains are. The question is: What data sets are they prioritizing? We know that inflation, consumption and production numbers fell in December. But January’s jobs report paints a picture of an extremely strong labor market that could keep inflation in line. continued at a high level, especially in the service sector, the sector with the largest increase last month. Fed Chairman Jerome Powell said he was focusing on the labor market, which he described in his post-meeting news conference on Wednesday as “out of balance.” Investors betting on a pause or swing in interest rates could also be forced by the Fed to find a new equilibrium.
Ordered This to get this report delivered directly to your inbox each morning before the market opens.