Stocks slid Friday as investors digested hotter-than-anticipated jobs data, which worried investors looking for signals that the Federal Reserve can begin slowing interest rate hikes.
The Dow Jones Industrial Average dropped 144 points, or 0.4%. The S&P 500 lost 0.7%, while the Nasdaq Composite shed 0.9%.
The S&P 500 and the Nasdaq are on track for modest weekly gains, while the Dow is on pace for a similarly minor loss.
Nonfarm payrolls increased 263,000 in November, a bigger gain than the 200,000 increase expected by economists polled by Dow Jones. The unemployment rate held steady at 3.7%. Average hourly earnings also came in above expectations, jumping 0.6% compared with the prior month and 5.1% against the same month a year ago.
Treasury yields jumped while stocks slid as investors digested the data, which was closely watched, with labor considered a relatively stubborn area of the economy. Investors were hoping for a number that was both low enough to signal the labor market was cooling in response to prior interest rate hikes and strong enough to indicate the U.S. could avoid a recession.
“The supply of workers remain low, the demand for workers remains high,” said Michael Arone, chief investment strategist at State Street Global Advisors. “That means wage inflation will remain sticky, and that’s a problem for stocks going forward because it’s likely to keep the Fed hawkish rather than dovish.”
This is the final monthly employment report before the Fed’s two-day meeting…