US stocks and government bonds slid Thursday while the dollar strengthened after a stronger-than-expected jobs report underscored the resilience of the job market amid the Federal Reserve’s aggressive campaign to combat high inflation.
Wall Street’s benchmark S&P 500 slipped 1.2 percent, while the tech-heavy Nasdaq Composite fell 1.5 percent, erasing small gains from the previous session. Meanwhile, Amazon’s shares lost 2.4 percent each day after the e-commerce giant announced it would lay off 18,000 employees.
The declines came after US private sector employment rose 235k in December, ahead of estimates, according to payroll processor ADP. Economists polled by Reuters had expected a 150k gain, suggesting the US job market will remain tight even if the economy shows signs of slowing. Meanwhile, initial jobless claims for the last week of December fell to 204k from a revised 223k the previous week.
ADP figures support a view expressed in the minutes of the Federal Open Market Committee’s December meeting released on Wednesday that labor market conditions in the world’s largest economy are exacerbating upward pressure on wages and prices.
“Despite the tightening measures implemented so far, the [FOMC] still sees the labor market as tight and inconsistent with price stability,” said Michael Gapen, US economist at Bank of America.
Read more about today’s market movements.
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