Slow Job Recovery and Powell's Warning... Nasdaq Plunges at Opening (Comprehensive)

Employment Recovery Pace Clearly Slows
Nasdaq Declines for Second Consecutive Day
Powell's Emphasis on Uncertainty Continues to Impact

[Image source=AP Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] A signal indicating sluggish employment recovery in the United States has emerged. Coupled with Federal Reserve (Fed) Chairman Jerome Powell's remarks the previous day about the uncertain direction of the economy, the New York stock market opened with a sharp decline.

As of 9:45 a.m. on the 17th (local time), the Dow Jones Industrial Average was down 1.11%, the S&P 500 index was down 1.31%, and the Nasdaq index was down 1.7% in the New York stock market. The Nasdaq index, which reversed to a decline at the end of the previous day, also started with a sharp 2% drop but slightly reduced its losses.

Apple is showing a decline of over 2%, and Tesla is down over 4%. Major tech stocks such as Microsoft, Facebook, and Amazon are also down 1-2%. Nikola, a hydrogen truck company facing fraud allegations, is rising by 2%, challenging for a second consecutive day of gains.

Snowflake, which debuted on the stock market a day earlier with a rise of 111%, is down 8%. CNBC reported that stocks that doubled in price upon initial listing have generally experienced sluggish price trends afterward.

The U.S. Department of Labor announced that new unemployment claims for the week of September 6-12 totaled 860,000. Although this was better than the market expectation of 875,000 according to Dow Jones estimates, the decrease of only 33,000 claims from the previous week indicates a slowdown in employment recovery.

U.S. media positively evaluated this as a sign that the job market is improving but also noted that the number of unemployed remains unusually high.

The New York Times (NYT) pointed out that although new unemployment claims have decreased, the number of layoffs remains abnormally high by historical standards.

AP News also stated that COVID-19 continues to threaten the U.S. job market. The news agency explained that new unemployment claims have exceeded 700,000 for 26 consecutive weeks, noting that during the 2008 global financial crisis, weekly new unemployment claims never surpassed 700,000.

The slowdown in job market improvement, combined with Fed Chairman Jerome Powell's warning the previous day, is increasing market concerns. Chairman Powell mentioned at a press conference that although the economic recovery was faster than expected, the outlook remains uncertain. After the Fed's announcement to hold interest rates steady the previous day, the New York stock market, which had shown strength, declined following Powell's remarks.