JOBS WALL TREAT
Dow up on report
Wall Street is eating up the latest jobs data — like Goldilocks finding a porridge that is just right.
The Dow Jones industrial average soared 440.53 points, or 1.8 percent, closing at 25,335.74 Friday after the Labor Department reported the US economy added 313,000 jobs in February — blowing past analyst estimates of 200,000. Unemployment was 4.1 percent for the second month in a row.
Meanwhile, wages, although still climbing, grew only 2.6 percent in February. That’s down from the 2.9 percent year-overyear growth initially reported for January.
Bottom line: The US economy promises to keep adding jobs this year without overheating, lessening the risk of interest rate hikes by the Fed that could slam stocks.
“It feels like this report is an extension of the ‘Goldilocks scenario,’” Mona Mahajan, US investment strategist of Allianz Global Investors, said.
Friday’s market reaction stood in stark contrast to last month’s, when the Dow plunged 666 points on the release of January’s job figures, which showed wages growing at their fastest pace since 2009. Volatile trading continued throughout February.
But January’s shocking wage growth figures were downgraded by the Labor Department to 2.8 percent, helping to cool inflation fears.
“We’ve seen above consensus growth [measured in new jobs] with little to no inflation,” Mahajan said of the latest employment data. “The report couldn’t have been better for the markets,” Jack Ablin, chief investment officer at Cresset Wealth Advisors, told The Post.
“Strong job gains combined with healthy, but not excessive, wage increases was a powerful combination,” Ablin said.
Markets whipsawed last month as new Federal Reserve Chairman Jerome Powell’s first testimony before Congress made it appear certain that the Fed would hike rates four times this year — instead of the three hikes indicated in December.
But after a volatile month, the market now appears prepared for a “new normal,” Mahajan said, adding, “It feels like the market is anticipating a fourth rate hike now.”
Nevertheless, investors will be paying close attention to the Federal Open Market Committee’s meeting later this month in which new projections are expected to be released.
Meanwhile, the 10-year Treasury note yield climbed as high as 2.91 percent following the Labor Department’s report Friday — a level that previously caused massive sell-offs.
The S&P 500 climbed 1.7 percent, to 2,786.57, and the tech-weighted Nasdaq hit a fresh high — gaining 132.86 points, to close at 7,560.81.
“This report was good for both Main Street and Wall Street in that while jobs growth expanded along with the work week, wage growth pulled back,” Quincy Krosby, chief market strategist at Prudential Financial, said.