the Dow jumped 175 points to 20,060, with Goldman Sachs contributing the most gains. The S&P 500 rose 0.7 percent, with financials rising 1 percent. The Nasdaq advanced 0.4 percent.
The U. S. economy added 227,000 jobs in January, while the unemployment rate ticked higher to 4.8 percent, the Bureau of Labor Statistics said Friday. Economists polled by Reuters expected payrolls to grow by 175,000 with the unemployment rate holding steady.
“Here’s the good: It’s better than expected and much better on the private payrolls,” said Art Hogan, chief market strategist at Wunderlich Securities, adding the labor force participation rate also rose slightly. “When you see the unemployment rate go higher for the right reason, that’s a positive.”
Average hourly earnings, however, rose just 3 cents and 2.5 percent on an annualized basis. The average work week was unchanged at 34.4 hours.
The report was “what the Fed needs, but the wages growth was weaker than expected,” said Quincy Krosby, market strategist at Prudential Financial. “When you have an economy that is so dependent on consumer, wages are very important.”
U.S. Treasurys erased earlier losses following the report’s release, with the benchmark 10-year note yield falling to 2.437 percent, while the short-term two-year note yield held near 1.17 percent. “Had wages moved [further] higher, the 10-year yield have moved above 2.5 percent,” said Prudential’s Krosby.
The Federal Reserve held its first monetary policy meeting this week and opted to keep interest rates unchanged.
Craig Bishop, vice president of U.S. fixed income at RBC Wealth Management, said Friday’s jobs report should keep the Fed on a moderate normalization path. “We had two really solid numbers in the headline and participation rate, but there wasn’t anything else to write home about,” he said. “I think the trend in wages overall is higher, but not enough to increase inflation.”
The report was the first since President Donald Trump took office on Jan. 20. In the past, Trump has been critical of the unemployment rate, saying it understates the actual level of joblessness.
Other data released Friday included December factory orders, which rose 1.3 percent, and the January read on the ISM nonmanufacturing index, which came in at 56.5, slightly below December’s 56.6.
Despite Friday’s gains, the three major indexes were on track to post weekly losses amid uncertainty surrounding some of Trump’s policies, particularly an executive order barring entry into the U.S. to citizens from seven Muslim-majority countries.
Overseas, European equities traded broadly higher, with the Stoxx 600 index rising 0.6 percent.
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