US job growth does not mean the market grows

In February, 379,000 new jobs were created  - almost 200,000 more than economists had expected. Moreover, the unemployment rate fell a little, while experts had expected stagnation. 

The unemployment rate fell slightly to 6.2 percent. And wages rose, with economists predicting they will rise further with the minimum wage increase proposed by the White House. 

At the beginning of the year, the job market was also doing significantly better than first estimated: 166,000 jobs were created in January and not as initially estimated at 49,000. Restaurants and hotels in particular recorded high job gains. By far the most new jobs were created there in February. This provided fresh hope for job seekers looking for a new job in a changed landscape where even the job interviews could be online.

This also gave the US stock markets a boost at the start of the stock market in New York. The pleasing job data initially provided relief on the stock markets. But then the flip side of the coin emerged: the recovery in the US labor market pushed back yields on ten-year US Treasuries - to just over 1.6 percent, the highest level in a year. 

Investors immediately pulled the emergency brake again, with wall Street indexes sliding into negative territory. Because when interest rates rise, bonds become an alternative to equities. The rise in interest rates had already put some brakes on the stock markets in recent days. 

Wall Street made the late turnaround In the evening, the situation on the bond market eased somewhat. The yield on 10-year U.S. government bonds fell back to 1.57 percent. Investors returned to the stock market. The Dow Jones turned up almost 1.9 percent at 31,496 points, an almost as high a gain for the week. 

The market-wide S&P 500 rose nearly 2 percent to 3,841 on Friday. The recently badly hit technology exchange Nasdaq also recovered significantly on Friday. The Nasdaq index has fallen 11 percent since mid-February.

Report this Page