THIS IS A BREAKING NEWS UPDATE. AP's earlier story appears below.
Stocks are swinging lower through a roller-coaster Friday following a blockbuster report on the
The S&P 500 was back down 0.5% in afternoon trading after briefly recovering from early losses. Other stock indexes were similarly shaky as
The blistering data suggests the economy may not be in a recession, as feared. But it also undercuts investors' speculation that a slowing economy may mean a peak for inflation soon. That means the
“It's a reminder for investors on how uncertain Fed policy is going forward and the strong jobs market data shows just how far the Fed has to go,” said
Stocks of technology and other high-growth companies once again took the brunt of the losses amid the rising-rate worries, and the Nasdaq composite fell 0.8%, as of
The good news on the jobs market helped to limit losses for the Dow Jones Industrial Average, whose stocks tend to move more with expectations for the overall economy. It was down 0.1%, or 21 points, at 32,705.
Beyond the nation’s strong hiring, wage growth for workers also unexpectedly accelerated last month. That's helpful for households trying to keep up with the fastest price gains in 40 years. But it also raises worries on
Higher wages can cause companies to raise prices for their own products to sustain profits, which can lead to something economists call a “wage-price spiral.”
To be sure, some market watchers also pointed to numbers within Friday’s employment report suggesting the jobs market may not be as strong as the overall numbers imply. The number of people with multiple jobs rose by more than half a million, for example, said
“That was mostly from people who already have a full time job and then the second job is part time,” he said. “Maybe this is more superficially impressive than substantively impressive.”
Higher mortgage rates had cut into the housing industry, in particular, after the Fed raised its short-term rates four times this year. The last two increases were triple the usual size, and the Fed has raised its benchmark overnight rate from nearly zero by 2.25 percentage points.
“Today's print, coming in much stronger than anticipated, complicates the job” of the
Traders scrambled to place bets for bigger hikes coming out of the Fed’s next meeting. They have flipped their expectations from a day earlier and now largely expect the Fed to hike by 0.75 percentage points, instead of by half a point.
Such increases hurt investment prices in the near term, and they raise the risk of recession further down the line because they slow the economy by design.
Such expectations also mean the two-year
On Friday,
In overseas stock markets,
Veiga reported from
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