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US stocks rose on Friday as investors digested the last monthly jobs report of the year, a crucial test of the prospects for interest-rate cuts in December and beyond.
The Dow Jones Industrial Average (^DJI ) gained about 0.3% and the S&P 500 (^GSPC) rose 0.2%, after the gauges drifted away from all-time highs at Thursday’s close. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) increased roughly 0.3%.
The US economy added 227,000 jobs in November, slightly more than expected, as the labor market rebounded from October data that was dinged by severe weather and labor strikes. The unemployment rate unexpectedly ticked up to 4.2%. Yahoo Finance’s Josh Schafer has all the details here.
The report largely matched hopes for a “Goldilocks” reading — strong enough to dampen concerns about the economy, but soft enough to keep the Fed’s options open on lowering rates this month and into next year.
On Friday, markets were pricing in around 88% odds the Fed lowers rates by a quarter percentage point on Dec. 18, per the CME FedWatch Tool, compared with about 70% before the report.
Meanwhile, the rally in bitcoin (BTC-USD) continued to flag, with the cryptocurrency slipping to trade around $98,000. Options show some investors are hedging against a deeper pullback after the leading token’s record-breaking surge to over $100,000 for the first time. The rally has been spurred by hopes of support for digital currencies from President-elect Donald Trump, who on Thursday named former PayPal (PYPL) COO David Sacks as his “White House AI & Crypto Czar.”
On the corporate front, shares of Lululemon (LULU) and Ulta Beauty (ULTA) jumped in premarket trading after the retailers both boosted profit forecasts.
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One-year inflation expectations hit highest level in six months
Consumers are growing more concerned about the path forward for inflation over the next year.
The latest consumer sentiment survey from the University of Michigan revealed that consumers expect inflation to hit 2.9% in a year, a increase from last month’s expectation of 2.6%. December’s reading is the highest in six months but within the 2.3% to 3% range seen in the two years before the pandemic.
Expectations for long-run inflation slipped higher, though, falling to 3.1% from 3.2% the month prior.
The overall consumer sentiment index popped to a reading of 74, up from 71.8 in November.
Overall, Surveys of Consumers Director Joanne Hsu noted that consumer views on inflation varied based on political party.
“Democrats voiced concerns that anticipated policy changes, particularly tariff hikes, would lead to a resurgence in inflation,” Hsu said in the release. “Republicans disagreed; they expect the next president will usher in an immense slowdown in inflation.”
Also in this months data, the survey showed a large increase in buying conditions for durable goods which posted current economic conditions by more than 20%.
“Rather than a sign of strength, this rise in durables was primarily due to a perception that purchasing durables now would enable buyers to avoid future price increases,” Hsu said.
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Stocks rise as unemployment rate edges higher
A jobs report that largely matched hopes for a “Goldilocks” reading sent stocks higher as investors digested a crucial test of the prospects for interest-rate cuts in December and beyond.
The Dow Jones Industrial Average (^DJI ) gained about 0.3%, and the S&P 500 (^GSPC) rose 0.2%, after the gauges drifted away from all-time highs at Thursday’s close. Meanwhile, the tech-heavy Nasdaq Composite (^IXIC) increased roughly 0.3%.
The US economy added 227,000 jobs in November, slightly more than expected, as the labor market rebounded from October data that was dinged by severe weather and labor strikes. The unemployment rate unexpectedly ticked up to 4.2%.
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Jobs report: The key numbers
The US labor market rebounded from an October swoon, adding more jobs than expected in November, while the unemployment rate ticked higher to 4.2%.
Here’s the breakdown on the November hiring front:
Yahoo Finance’s Josh Schafer has all the details here.
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