Ahead of another consequential jobs report, stock futures remained relatively unchanged.
Investors are likely hoping for a subdued jobs report. That could mean that the Fed has less room to keep hiking rates by historic levels in its fight against inflation.
Dow futures were up 25 points, or 0.1%.
S&P 500 futures fell 0.1%.
Nasdaq futures fell 0.4%.
US oil rose 0.9% to $89 a barrel. Average US gas prices rose to $3.89 a gallon.
Americans are still getting a decent-sized bump in their weekly paychecks. Wages rose 5% in September over the past year, according to Friday’s jobs report. The problem is that the pace of inflation is still higher than that. In other words, shopping for stuff like groceries and paying monthly rent takes a huge bite out of that higher compensation.
The Federal Reserve wants to see wage growth slow. If that happens, the hope is that companies will be less likely to keep raising consumer prices at a breakneck pace.
For one, these businesses won’t have as much pressure on their bottom line from paying higher salaries. And companies also will have to realize that if their customer has less in their pocket, price increases may backfire and lead to lower demand.
Consumer prices surged 8.3% year-over-year in August. The government will report CPI numbers for September next week. Economists are expecting a slight slowdown, to 8.1%. The Fed (and American shoppers) would love to see that number fall even further. The sooner the better.
The hard thing to wrap your head around is feds are trying to cause job loss and as long as people have jobs and wages are going up retailers are going to keep prices high, we are so conditioned to buy in this country that we can not tell Americans to stop buy shit we have to take American Jobs away and that is so fucking sad. Republicans, we tell you the democrats did this no this was Trump not responding to covid in time to cause millions of dead Americans. Not policy and it is not the government that controls the economy the people do.
US stocks opened lower on Friday as investors digested a September jobs report that came in hotter than expected.
The U.S. economy added 263,000 jobs in September, higher than analyst estimates of 250,000. The unemployment rate came in at 3.5%, down from 3.7% in August.
Strong employment data indicates that the Federal Reserve will continue with its aggressive interest rate hikes to cool the economy and fight persistently high inflation, causing economic pain.
The Dow fell by 320 points, or 1.1%, on Friday morning.
The S&P 500 was down 1.5%.
The Nasdaq Composite was 2% lower.
The September jobs numbers were probably strong enough to keep the Federal Reserve on track to (chant like a high school cheerleader) be aggressive, be be aggressive with regards to rate hikes.
According to fed funds futures on the CME, investors are now pricing in a more than an 80% chance of a fourth straight three-quarter of a percentage point hike at the Fed’s November 2 meeting. That’s up from about a 57% probability of another 75 basis point hike a week ago and just a little more than 1% chance a month ago.
What’s more, traders are now betting that there’s about a 15% probability of yet another three-quarter point rate increase at the Fed’s December 14 meeting. The market was pricing in zero chance of that happening only a week ago.
It’s no wonder then that stocks are sliding Friday following the jobs report.
