New York Stock Market's 3 Major Indexes Close Higher Simultaneously
US October Employment Growth Slows, Unemployment Rate Rises
The three major indices of the U.S. New York stock market all closed higher following news that U.S. employment growth significantly slowed in October. The clear slowdown in employment strengthened expectations that the Federal Reserve's (Fed) interest rate hikes have effectively come to an end.
On the 3rd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 34,061.32, up 222.24 points (0.66%) from the previous session. The Standard & Poor's (S&P) 500 index rose 40.56 points (0.94%) to 4,358.34, and the Nasdaq index finished at 13,478.28, up 184.09 points (1.38%) from the previous close.
The slowdown in U.S. job growth in October led to an expanded investor sentiment based on the assessment that further Fed rate hikes would be difficult. The U.S. Department of Labor reported that nonfarm payrolls increased by 150,000 in October compared to the previous month, significantly below the 170,000 forecast compiled by The Wall Street Journal (WSJ) experts.
The unemployment rate in October rose to 3.9%, up 0.1 percentage points from 3.8% in the previous month. This was the highest level in 1 year and 9 months since January 2022 (4.0%). The labor force participation rate in October was 62.7%, down 0.1 percentage points from the previous month. Average hourly wages in the private sector were $34, up 0.2% from the previous month and 4.1% higher compared to a year ago.
The October employment data clearly showed a slowdown in job growth and a rise in the unemployment rate. Fed Chair Powell said at a press conference on the 1st, "To reduce inflation, it appears necessary to have a period of below-trend growth and a cooling of the overheated labor market."
Additionally, the outlook that the economy is moving toward a 'Goldilocks' state is expected to gain more traction, as the labor market heat gradually cools without triggering mass layoffs. 'Goldilocks' refers to a moderate state that is neither too hot nor too cold, describing an ideal economic condition where there is strong growth without inflationary pressure.
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