Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, November 10, 2022.
Brendan McDermid | Reuters
U.S. stocks rose Friday after the December jobs report showed that employment was only slightly stronger and wage gains were less than expected, showing some signs of progress amid the Federal Reserve’s interest rate hikes to tame inflation.
The Dow Jones Industrial Average increased 102 points, or 0.31%, but was off highs of the day. The S&P 500 gained 0.15% and the Nasdaq Composite ticked 0.19% higher, but was weighed down by Tesla shares, which fell more than 4% after the company lowered prices on some vehicles in China.
The December nonfarm payrolls report showed that the U.S. economy added 223,000 jobs last month, slightly higher than the expected 200,000 jobs economists polled by the Dow Jones expected. In addition, wages grew slower than anticipated, increasing 0.3% on the month where economists expected 0.4%.
“All investors care about is that the data suggests inflation is moving towards the Fed’s target,” said Michael Arone, chief investment strategist at State Street Global Advisors. “That’s all investors care about and average hourly earnings suggest inflation continues to slow. They are excited about that.”
It’s the latest data showing how the U.S. economy is holding up to the central bank’s rate hikes to bring down high inflation.
The Dow on Thursday fell more than 300 points after the release of a stronger-than-expected ADP private payrolls report raised concern that the Fed would have to continue to hike rates and hold them high, stoking fears of a U.S. recession.
With Friday’s gains, stocks may tip into positive territory on the week. The Dow is currently up 0.06% in the first week of the year. The S&P 500 and Nasdaq are still on track to notch their fifth weekly loss, down 0.32% and 1.41% respectively.