Stocks rise after surprise change in US unemployment

After hitting a high of 4,606.31, which put it within one point of its 2023 peak, the S&P 500 stayed close to the flatline, while the Dow Jones Industrial Average gained 24 points, or 0.1%. 0.15% was added to the Nasdaq Composite. The unemployment rate unexpectedly decreased in November, from 3.9% in October to 3.7% in November, according to the nonfarm payrolls report.

Stocks fluctuated on Friday, with the S&P 500 expected to slightly fall for the week as the benchmark index takes a break after a five-week rally.

The US economy added 199,000 jobs, slightly more than the 190,000 estimate from Dow Jones and well ahead of the 150,000 jobs added in October. The data first raised concerns that the economy was running too hot for inflation to cool enough for the Fed to start retreating from its high-rates policy.

As early as March, some traders anticipate rate cuts from the Fed. The idea that the Fed is directing the US economy towards a soft landing—a steady economic recovery in the face of declining inflation—may, nevertheless, also find support in the monthly jobs report. In November, average hourly earnings, which are considered a leading indicator of inflation, increased roughly as anticipated due to an increase in job additions over the previous month.

According to a widely followed University of Michigan survey, consumer sentiment increased to its highest level since July in December, while inflation expectations decreased. The evidence currently available to those advocating for a soft landing is compelling, but there is one important disclaimer: the economy might not be ready for a landing at all.

On Wednesday, the Fed will announce its most recent policy decision. The S&P is down 0.2% for the week, while the Nasdaq has gained 0.2%. The Dow is expected to drop by 0.3% this week.