US Stock Market Overview – Stocks Rally Following Blowup Jobs ReportPayrolls rise by a record 4.8 million jobs
US stocks rallied on Thursday ahead of a long holiday weekend. The US markets will be close on Friday in observance of the US Independence Day. The rally was due to the stronger than expected US jobs number which saw its largest one-month gain in history. The Nasdaq 100 hit fresh-all-time highs and closed the week up more than 5%.
Most sectors in the S&P 500 index were higher, led by Energy, Communications bucked the trend. Facebook was the biggest loser in the communications space, declining by more than 1%. Oil prices rallied more than 1.5% which helped buoy energy shares. Despite the robust jobs data, initial jobless claims remained elevated as many are also still losing their jobs.
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US Employment Was Stronger than Expected
US nonfarm payrolls surged by 4.8 million in June and the unemployment rate fell to 11.1% according to the Bureau of Labor Statistics. Expectations had been for a 2.9 million increase and a jobless rate of 12.4%. The report was released a day earlier than usual due to the July Fourth holiday. The jobs growth marked a big leap from the 2.7 million in May, which was revised up by 190,000. The June total is easily the largest single-month gain in U.S. history. The news was not all rosy. Permanent job losses also jumped, rising by 588,000 to 2.883 million, the highest level in more than six years. The labor force participation level saw a sharp bump, rising to 61.5%, which brings it to 1.9 percentage points below its February level. Leisure and hospitality again accounted for the biggest jump, as the sector saw a 2.1 million gain, accounting for about 40% of the total growth.
Despite the increase in the number of jobs, many are still losing jobs. Jobless claims remained stubbornly high last week, with another 1.427 million Americans filing, above the estimate of 1.38 million. Continuing claims increased by 59,000 to 19.3 million.