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The action was more decisive in the bond market, where Treasury yields sank following the US jobs report. Employers hired more workers last month than economists expected, but the number was still a slowdown from May’s hiring. Plus, the unemployment rate unexpectedly ticked higher, growth for workers’ wages slowed and the US government said hiring in earlier months was lower than previously indicated.
Altogether, the data reinforced belief on Wall Street that the US economy’s growth is slowing under the weight of high interest rates. That’s precisely what investors want to see, because a slowdown would keep a lid on inflation and could push the Federal Reserve to begin cutting its main interest rate from the highest level in two decades.
Friday’s jobs report follows a mass of data showing a slowdown across the US economy. Reports earlier this week said business activity in both the US services and manufacturing sectors contracted last month, turning in weaker readings than economists expected. And US shoppers at the lower end of the income spectrum have been showing how difficult it is to keep up with still-rising prices, as balances owed on credit cards swell.
“What matters for long-term investors is whether fears of a recession become a reality,” said Brian Jacobsen, chief economist at Annex Wealth Management. “We think it’s unlikely we’ll see a recession this year or next, but that doesn’t mean the markets won’t fear one.”
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Gains for some big, influential stocks also helped support the market, even though the majority of stocks within the S&P 500 fell. Meta Platforms jumped 5.9 per cent, and Apple added 2.2 per cent.
Amazon rose 1.2 per cent after the announcement of a deal where the parent company of Saks Fifth Avenue will buy Neiman Marcus Group for $US2.65 billion ($3.9 billion). Amazon will hold a minority stake in the combined company.
In stock markets abroad, London’s FTSE 100 fell 0.5 per cent after UK voters ushered in a new regime by throwing out Conservatives in this week’s national election.
With AP