U.S. stocks were up sharply to end a volatile week. The rally came after a strong jobs report that showed the U.S. economy added 266,000 jobs in November. Low unemployment and rising wages support hopes that the consumer sector is strong enough to prevent weakness in the manufacturing sector from spreading to the broader economy. In that vein, the global manufacturing sector was dealt another blow today from a disappointing German industrial production report. However, European equities were higher on the day. Asian equites were also higher, despite some mixed economic data out of Japan. Oil was up following a two-day OPEC+ meeting that yielded an agreement to cut production. Gold fell and the dollar rose, as U.S. Treasury yields moved higher.
The Dow Jones Industrial Average (DJIA) was up 337 points (1.2%) to 28,015, the S&P 500 Index added 29 points (0.9%) to 3,146 and the Nasdaq Composite gained 86 points (1.0%) to 8,657. 850 million shares were traded on the NYSE and 2.0 billion shares changed hands on the Nasdaq. WTI crude oil added $0.77 to $59.20 per barrel and wholesale gasoline was $0.03 higher to $1.65 per gallon. Elsewhere, the Bloomberg gold spot price was $18.10 lower at $1465.10 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—rose 0.3% to 97.68. Markets were mixed for the week, as the DJIA and Nasdaq Composite dipped 0.1%,
while the S&P 500 Index advanced 0.1%.
Nonfarm payrolls jumped by 266,000 jobs month-over-month (m/m) in November, compared to the Bloomberg forecast of an 180,000 increase. The rise of 128,000 seen in October was revised to a gain of 156,000 jobs. Excluding government hiring and firing, private sector payrolls increased by 254,000, versus the forecasted gain of 178,000, after rising by 163,000 in October, revised from the 131,000 increase that was initially reported. The Department of Labor said notable job gains occurred in health care and in professional and technical services, while employment rose in manufacturing, reflecting the return of workers from a strike. Employment continued to trend up in leisure and hospitality, transportation and warehousing, and financial activities, while mining lost jobs. Job growth has averaged 180,000 per month thus far in 2019, compared with an average monthly gain of 223,000 in 2018. The unemployment rate dipped to 3.5% from October’s 3.6% rate, where it was expected to remain, while average hourly earnings were up 0.2% m/m, below projections of a 0.3% increase, but October’s initially-reported 0.2% rise was adjusted upward to a 0.4% gain. As such, y/y wage gains were 3.1% higher, versus estimates of a 3.0% pace, and versus October’s upwardly-revised 3.2% increase. Finally, average weekly hours remained at 34.4, matching estimates. The labor force participation rate dipped to 63.2% from 63.3%.
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