The U.S. stock markets received a much-needed shot in the arm on Friday from a strong monthly employment report that helped shares rebound from what had been a dismal week.
The Dow Jones Industrial Average jumped 208 points, or 1.2%, on Friday. The S&P 500 and the Nasdaq finished up 1.1% and 1%, respectively.
The monthly employment report from the Bureau of Labor Statistics showed that the economy added a healthy 248,000 new jobs in September, which dropped the nation’s unemployment rate below 6% for the first time in six years. More importantly for investors, the strong job growth was balanced against lower-than expected growth in wages and a dip in the labor participation rate from 315,000 people dropping out of the labor force.
That combination of good and bad news had some calling Friday’s numbers the “goldilocks” employment report because the job growth reflects an improving economy while the disappointing wage growth and lower job participation rate seem to have quelled some investors’ concerns that the Federal Reserve will move faster to raise interest rates.
Despite the strong Friday finish, though, all three blue-chip indices ended the volatile week on a down note, with the Dow Jones losing 0.6% for the week and the S&P 500 and Nasdaq both finishing down by 0.8%. Stocks suffered a widespread sell-off on Wednesday that saw the Dow Jones plummet by more than 230 points, while both the S&P 500 and the Nasdaq fell more than 1% that day.
Wednesday’s sell-off was the latest in what has been a topsy-turvy transition to the fourth fiscal quarter and October – a month with a history of stock market blues that includes historic crashes in 1929 and 1987. More recently, the market has been roiled by global crisis in Ukraine, airstrikes in Syria and pro-democracy protests in Hong Kong. U.S. investors have also been increasingly skittish over the prospect of the Fed raising interest rates sooner than expected.
