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Stronger-than-expected jobs report sends stocks tumbling – Precious metals slide after gold sees biggest daily gain in over 2 years – Wall Street fears jobs report will prompt Fed to raise interest rates higher – OPEC to consider deeper output cuts
The US economy added 263,000 jobs in November, surpassing economists’ expectations of 200,000 jobs, as well as defying aggressive attempts by the Federal Reserve to cool the economy and slow decades-high inflation, CNN reported. The unemployment rate remained steady at 3.7%, according to the latest monthly jobs snapshot from the Labor Department released on Friday.
A number of financial institutions believe the unemployment rate will rise in the coming year, with B of A expecting the unemployment rate to hit 5.5% in 2023, Morgan Stanley predicts 4.3%, and Goldman Sachs foresees a half a percentage point higher to 4.2%, Yahoo Finance reported.
Wall Street is concerned that a stronger-than-expected job report will convince the Federal Reserve it still has a long way to go before its interest rate hikes will produce their intended effect of slowing the labor market and inflation along with it. Prior to the jobs report, comments by Fed chair Jerome Powell on Wednesday led the market to believe the next interest rate hike might be a 50-basis point increase rather than the 0.75% it has done at each of its last four meetings, Yahoo Finance reported. Now some believe another three-quarter basis increase might also come in December.
Stocks tumbled in the wake of the jobs report on Friday, with the S&P 500 slipping 1.4%, as the Dow Jones industrial average fell by 1.1%, or nearly 400 points, while the technology-heavy Nasdaq Composite dipped 1.8%, Yahoo Finance reported.
The benchmark 10-year US Treasury note rose +0.074, topping 3.605%, and the rate-sensitive 2-year yield climbed past 4.4%.
International Brent crude futures traded 0.2% lower at $87.78 a barrel on Friday, while U.S. West Texas Intermediate futures dipped 0.3% to trade at $80.95.
European stock markets were also expected to open with small losses on Friday.
Ahead of the jobs report, gold futures edged lower, a day after gold posted its largest one-day gain in over two years.
Gold continuous contract dipped -16.60 to $1798.60, as silver continuous contract slid -0.141 at $22.70, while copper continuous contract dropped -0.04052 $3.777, MarketWatch reported.
OPEC+, a group of 23 oil-producing nations led by Saudi Arabia and Russia, is scheduled to convene on Sunday when they will consider deeper oil output cuts and a proposed price cap, CNBC reported. The meeting comes ahead of potentially disruptive sanctions on Russian oil, as well as weakening crude demand in China, amid mounting fears of a recession.
