The Dow and S&P 500 booked slight gains on Friday, but the Nasdaq slumped, after a jobs report for August showed a fewer-than-expected 130,000 new jobs were created in the month. The employment data, perhaps, supports market hopes for a rate cut later this month but does highlight some fragility in an area of the economy that has been mostly steadfastly solid.
Fed Chairman Jerome Powell, meanwhile, described the economy and labor market as healthy, speaking at a question-and-answer in Switzerland after the jobs report.
How did major benchmarks perform?
The Dow Jones Industrial Average rose 69.31 points, or 0.3%, to 26,797.46, while the S&P 500 index added 2.71 points, or about 0.1%, to 2,978.71. The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP +0.77% , however, slipped 13.75 points, or 0.2%, to finish at 8,103.07.
For the week, the Dow notched a 1.5% rise, the S&P 500 and Nasdaq both rose 1.8% over the period, according to FactSet data.
The Dow stands 2.1% shy of its record closing peak at 27,359.16, hit July 15, while the S&P 500 is about 1.6% short of its all-time closing high set July 26 at 3,025.86, and the Nasdaq is 2.7% from its July 26 record at 8,330.21.
What drove the market?
Echoing his speech two weeks ago in Jackson Hole, Wyoming, Powell said he is “not forecasting or expecting a recession” though he sees “significant” downside risks that the central bank will monitor.
Powell’s remarks—the last any Fed official will make due to a media blackout period in the run-up to the Fed’s Sept. 17-18 meeting—come after the Labor Department said the U.S. economy added 130,000 jobs in August, below the 173,000 expected by economists polled by MarketWatch and down from the 159,000 jobs added in July.
The unemployment rate remained steady at 3.7%, while average hourly earnings rose 0.4% month-over-month and 3.2% year-over-year. The private sector added only 96,000 jobs, as federal government hiring, mostly temporary Census-related employment, added 28,000 jobs.
Still, Powell described the labor market in his comments in Switzerland as solid.
Some market analysts agreed.
“The headline miss is disappointing for investors, but I wouldn’t overreact as there is underlying strength to this report, including average weekly hours worked picking up, the labor-force participation rate rising and strong wage growth,” said Michael Arone, chief investment strategist for State Street Global Advisors.