Markets reacted positively to August’s rise in jobs at 315,000 that was less than the previous month as hopes of lower inflation rose and fears of hawkish Fed rate hikes cooled
Stocks are opening higher on Wall Street after a solid
market last month that also didn't came in too high. The government
reported that hiring slowed last month, which is exactly what policymakers want
to happen in order to cool off inflation.
The addition of the 315,000 jobs was also in
line with what forecasters were expecting, a thankful lack of suprises that
investors found reassuring. The S&P 500 was up a bit more than half a
percent in the early going Friday, but is still headed for its third weekly
loss in a row.
Earlier, Wall Street shifted between small gains and losses
Friday ahead of U.S. jobs data that might reinforce U.S. Federal Reserve plans
for more interest rate hikes meant to cool inflation.
Futures for the Dow Jones industrials and S&P 500 were
each down less than 0.1% before the bell.
Investors awaited figures on August hiring for an update on
to four earlier hikes to cool inflation that is at a four-decade high. A
strong reading would give ammunition to Fed officials who say higher interest
rates are needed to slow economic activity and reduce upward pressure on
consumer prices.
Beyond usual hike margin
If more than the expected 300,000 jobs were added, it
"could likely reinforce further lean towards" a rate hike as big as
0.75 percentage points at this month's Fed meeting, Yeap Jun Rong of IG said in
a report. That would be three times the Fed's usual margin of change.
normal">  |
normal">Currency traders work at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Friday, Sept. 2, 2022. Asian stock markets were mixed Friday ahead of U.S. jobs data that might influence Federal Reserve plans for more interest rate hikes to cool surging inflation. (AP Photo/Ahn Young-joon) |
In midday trading, the FTSE 100 in London rose 0.6% and the
DAX in Frankfurt advanced 1.3%. The CAC 40 in Paris added 0.5%.
On Thursday, the S&P 500 rose 0.3%, rebounding from a
four-day string of declines.
The benchmark ended August with a 4.2% loss after surging
the previous month on expectations the Fed might ease off rate hikes due to
signsU.S. economic activity was cooling and inflation might be leveling off.
Those hopes were dashed last week when Chair Jerome Powell
said the Fed needs to keep rates elevated enough "for some time" to
slow the economy. The only question for many investors is how much and when the
last week in another sign of a strong job market. It said earlier this week
there were two jobs for every unemployed person in July.
The Dow finished up 0.5% on Thursday, while the Nasdaq slid
0.3%.
In Asia, the Shanghai Composite Index added less than 0.1%
to 3,186.48 while the Nikkei 225 in Tokyo lost less than 0.1% to 27,650.84. The
Hang Seng in Hong Kong sank 0.7% to 19,452.09.
China on Thursday ordered most residents of Chengdu, a
western city of 21 million people, to stay home following a virus outbreak. The
area is recovering from power rationing after a drought depleted reservoirs for
hydroelectric dams, but economists said earlier that the national economic
impactshould be limited because the region's industrial output is a small part of
China's total.
The Kospi in Seoul fell 0.3% to 2,409.41 and Sydney's
S&P-ASX 200 declined 0.3% to 6,828.70.
India's Sensex declined 0.5% to 59,032.82. New Zealand and
Jakarta gained while Singapore and Bangkok declined.
In energy markets, benchmark U.S. crude rose $1.47 to $88.08
per barrel in electronic trading on the New York Mercantile Exchange. The
contract tumbled $2.94 to $86.61 on Thursday. Brent crude, the price basis for
international oil trading, gained $1.43 to $93.79 per barrel in London. It
plunged $3.28 the previous session to $92.36 a barrel.
The dollar rose to 140.44 yen from Thursday's 140.23 yen.
The euro gained to $1 from 99.45 cents.
Text and images credit: AP
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USinflation jumps to 9.1%, highest rate since 1981 as consumer pressures
intensify
