Business in Brief: US unemployment falls to nearly 1969 levels; hiring solid
US unemployment falls to nearly 1969 levels; hiring solid
WASHINGTON (AP) — Another month of strong hiring drove the nation’s unemployment rate down to 3.8 percent — tantalizingly close to the level last seen in 1969, when Detroit still dominated the auto industry and the Vietnam War was raging.
Employers added 233,000 jobs in May, up from 159,000 in April, the Labor Department reported Friday. And unemployment fell to an 18-year low.
The report shows that the nearly 9-year-old economic expansion — the second-longest on record — remains on track and may even be gaining steam. Employers appear to be shrugging off recent concerns about global trade disputes.
“The May jobs report revealed impressive strength and breadth in U.S. job creation that blew away most economists’ expectations,” said Scott Anderson, chief economist at Bank of the West.
With the unemployment rate so low, businesses have complained for months that they are struggling to find enough qualified workers. But Friday’s jobs report suggests that they are taking chances with pockets of the unemployed and underemployed whom they had previously ignored.
Stocks, interest rates climb as job market keeps improving
NEW YORK (AP) — Stocks climbed Friday after a report showed the U.S. job market is still revving higher, even with the specter of a possible trade war hanging over markets around the world.
The better-than-expected news on jobs helped the S&P 500 more than recover all its losses from earlier in the week. Interest rates and the value of the dollar also rose on expectations that the Federal Reserve got more justification to continue raising interest rates steadily, with its next decision due in about a week and a half.
Beyond the jobs report, stronger-than-expected readings came in on U.S. manufacturing growth and construction spending. They helped turn attention away from the worries about global trade tensions and European politics that had dragged on stocks in recent weeks.
“It’s refreshing that some strong economic data today took some focus off the trade rhetoric,” said Jon Adams, senior investment strategist at BMO Global Asset Management. “It’s been a banner day for U.S. data overall. You look at the payrolls report, and it’s hard to find too much negative in there.”
The strong reports raise the likelihood that the Federal Reserve may increase short-term interest rates four times this year, rather than just three. Higher rates can hurt stock prices, but Adams said investors appear relatively prepared for the possibility “because the Fed is hiking for the right reasons.”
The S&P 500 index rose 29.35 points, or 1.1 percent, to 2,734.62. For the week, it climbed 0.5 percent after scrambling back from a loss of more than 1 percent earlier.
The Dow Jones industrial average jumped 219.37, or 0.9 percent, to 24,635.21, and the Nasdaq composite rose 112.21, or 1.5 percent, to 7,554.33. The Russell 2000 of small-company stocks rose 14.37, or 0.9 percent, to 1,647.98.