The U.S. economy added an astonishing 517,000 new jobs in January, and investors fear the possibility of higher interest rates at the next meeting.
It doesn’t necessarily mean that all good news is good, at least not in today’s case. Wall Street tumbled in Friday’s trading session despite the astonishing job growth report.
The U.S. economy added a total of 517,000 jobs in January, erasing fears about the labor market condition. The report was released on Friday morning by the Bureau of Labor and Statistics.
Experts predicted a total of 185,000 jobs in January, far exceeding all market expectations. This demonstrates that the labor market is doing fine despite the market turmoil and higher interest rates.
The report added that the unemployment rate in the U.S. declined from 3.5% to 3.3%. The U.S. economy is going through a highly complicated roller coaster.
Concerns have been raised in the United States about the extension of higher interest rate hikes due to the rapid rise in job numbers. As for the workers’ participants, the report shows that their rate increased by 0,01% to 62,3%. The year-over-year hourly earnings rating on the other hand fell by 0,04% to 4,4%
Wall Street fell as fears of further increases in interest rates increased; the S&P 500 benchmark fell by 0.85% to 4,145.30 basis points. Tesla shares are thriving due to an astonishing fourth-quarter report; the company’s shares rose today by 2.8%. Apple Inc., Meta, and the Netflix platform are among today’s top performers as well. Still, the Nasdaq feature slumped and declined by 0.9% to 12,076.40 basis points.
The Dow Jones Average Industrial declined by 0,44% to 33,902.71 basis points. No one can argue that the United States economy is making the best efforts and achieving the best results to maintain and improve its working quality. However, the rapid expansion of the labor market may encourage FED officials to continue raising interest rates for an extended period.
The U.S. Federal Reserve remains committed to bringing inflation from its 40-year all-time high to 2–3 percent. This includes creating more jobs, raising employee wages, and aggressively raising interest rates.
In general, market experts expect a 25% interest hike in February, the first interest hike of the year 2023. Over the past 11 months, since March, the U.S. central banks have lofted their interest rates aggressively, totaling 450 basis points. The number is more likely to increase but at a great cost.
In 2022, all Wall Street indexes will be in bear market territory, which increases the probability of a market recession.
The vast majority of market experts see a more than 60% market recession in 2023, especially in the Eurozone.
Meanwhile, the energy market, particularly oil, saw its prices fall by 5% this week alone. On Friday, the West Texas Intermediate fell by 2,53% to $73 per barrel. Brent oil prices fell by 2.26 percent to $80.04 per barrel. Brent oil remains relatively higher even when its prices keep falling.