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US Stock Market Overview – Stocks Surge Following Robust US Jobs Report

US consumer sentiment rises
David Becker

US stock prices surged on Friday following a stronger than expected US jobs report. Most sectors were higher led by Energy, Utilities bucked the trend. US yields moved higher in the wake of the jobs report, pushing the dollar higher. Consumer sentiment also came in stronger than expected according to a preliminary report by the University of Michigan. The jobs report generate robust gains, pushing the S&P 500 index back into the black for the week, after experiencing declines earlier in the week. The VIX volatility index dropped more than 6% as complacency and greed entered with the risk on trade.

Employment Number Beat Expectations

The BLS reported on Friday that November non-farm payrolls increase by 266,000 and the unemployment rate fell to 3.5. Those totals easily beat expectations which was for a rise of 187,000 and an unemployment rate that remains unchanged from October’s 3.6%. The decline in November’s jobless rate came amid a corresponding 0.1 percentage point drop in the labor force participation rate, to 63.2%. Average hourly earnings rose by 3.1% from a year ago, while the average workweek held steady at 34.4 hours. Expectations has been for wage gains of 3%.

The U6, a separate gauge of unemployment that includes discouraged workers and the underemployed declined as well, falling to 6.9%, one-tenth of a percentage point below October. In addition to the robust November gains, revisions brought up totals from the two previous months. September’s estimate went up 13,000 to 193,000 and the initial October count increased by 28,000 to 156,000. Those changes added 41,000 to the previous tallies and brought the 2019 monthly average to 180,000, compared with 223,000 in 2018.

Inventor Sentiment Surges

The University of Michigan’s Surveys of Consumers data showed that of consumer sentiment jumped to 99.2 in its preliminary read for December from a final November reading of 96.8. Expectations had been for a much more modest tick up to 96.9.

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