Monday, 28 November, 2022

Stocks slump, dollar boosted by US jobs data

NEW YORK: Stocks slid and the dollar surged Friday after US jobs data showed only a timid slowdown in the labor market, setting the stage for further aggressive interest rate hikes.

Equity markets have taken a battering in the past couple of months, as the US Federal Reserve has made it clear it intends to continue to aggressively raise interest rates until soaring inflation is tamed, even if that means sending the economy into a recession, reports AFP.

There was a brief rebound at the start of the week, when investors hoped data pointing to an economic slowdown would allow the Fed to "pivot," or slow down rate hikes.

However, the jobs report shows the US labor market is still robust, with hiring in the US economy slowing only slightly in September, to a net gain of 263,000 jobs, from 315,000 in August.

That was more than the consensus forecast for a net gain of 250,000, sending equities lower and the dollar higher.

"Those hoping for a Fed pivot have been sorely disappointed with today's job numbers, which have confirmed that (the) US economy continues to rumble along quite well," said Chris Beauchamp, chief market analyst at online trading platform IG.

"The latest bear market bounce has now begun to wilt as investors wearily return to expectations" of further Fed rate hikes.

Futures markets show investors saw the report as boosting the odds that the Fed will again undertake a 0.75 percentage point interest rate increase in November.