U.S. stocks closed sharply higher Friday, with the Dow Jones Industrial Average having its best day in two months, after the employment report from the Labor Department beat economists’ consensus expectations, showing an estimated 266,000 new jobs created in November, the most since January, while the unemployment rate fell to a 50-year low.
Investors also remained optimistic about the chances of a U.S. — China trade deal, even though the deadline that will see import duties increased looms on Dec. 15.
How did the major benchmarks perform?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -4.44% rose 337.27 points, or 1.2%, at 28,015.06, while the S&P 500 index /zigman2/quotes/210599714/realtime SPX -4.41% gained 28.48 points, or 0.9%, to 3,145.91, and Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -4.41% advanced 85.83 points to 8,656.53, a gain of 1%.
The Dow notched its best day since Oct. 4 and sits 0.5% away from its record close of around 28,164 set on Nov. 27, while the S&P 500 posted its best percentage gain since Nov. 1 and remains 0.2% from its record of 3,153.63 also set on Nov. 27. The Nasdaq’s advance put it 0.6% below its Nov. 27 record close of 8,705.18.
For the week, the Dow and Nasdaq lost 0.1%, while the S&P 500 gained 0.2%.
What drove the market?
The U.S. economy created 266,000 new jobs in November, the Labor Department reported, the biggest gain since January, signaling the labor market remains robust even though economic growth has slowed. The government also revised the increase in new jobs in October to 156,000 from 128,000 and September’s gain was raised to 193,000 from 180,000.
The increase in new jobs easily topped the 180,000 MarketWatch forecast, helped by the end of the General Motors /zigman2/quotes/205226835/lastsale GM -7.31% autoworkers strike which added roughly 50,000 jobs to the payrolls number.
The unemployment rate slipped to 3.5% from 3.6% and matched a 50-year low. The average wage paid to American workers rose 7 cents, or 0.2%, to $28.29 an hour. The 12-month rate of hourly wage gains slipped to 3.1% from 3.2%.
The strength of the employment report was seen justifying Federal Reserve Chairman Jerome Powell’s policy of leaving interest rates on hold, analysts said.
“Today’s jobs report should have the Fed feeling good about the current stance of policy of remaining on hold at 1.50-1.75%,” Michelle Meyer, Bank of America Merrill Lynch’s chief U.S. economist wrote in a note. “Moreover, the strong employment activity suggests that the economy is in a better spot than previously thought to withstand any potential drag from the US-China trade war and other geopolitical risks in the outlook.”
In other U.S. economic data, the University of Michigan’s December consumer-sentiment indicator rose to 99.2 from 96.8 in the prior month.
Meanwhile, U.S.-China trade talks also remain in the spotlight ahead of the Dec. 15 deadline for $156 billion in new tariffs on consumer goods to take effect.