The first full trading week of January was a consequential one, largely because nonfarm payroll reports were released. On Wednesday, the ADP nonfarm payroll report revealed that 122,000 jobs were added in December, which was lower than the expected 139,000 and was also lower than November’s 149,000 figure.
On Friday, the Bureau of Labor Statistics (BLS) released its report that found the economy added 256,000 jobs in December. This was higher than the expected 164,000 additional positions and was also higher than the 212,000 added last month. It’s worth noting that November’s figure was revised downward, so it’s possible that changes could be forthcoming to December’s tally as well.
The unemployment rate ticked down to 4.1 percent from 4.2 percent. Average hourly earnings were steady at .3 percent for the month of December, which was what analysts had expected prior to the release of that information.
The FOMC meeting notes from the December gathering were made public. One of the key takeaways was that Donald Trump’s plan to use tariffs as a trade tool could make it harder to restrain upward price pressures. Ultimately, it could result in slower rate cuts in the coming year.
Furthermore, the Fed announced that rate cuts could be on hold without any tariffs because inflation has remained sticky. With demand for services still strong, it’s unlikely that inflation will return to the stated goal of 2 percent anytime soon. On Tuesday, the ISM Services PMI came in at 54.1 compared to an expected 53.5. Also on Tuesday, the JOLTS labor survey indicated that there were 8.1 million positions available, which was higher than the 7.73 believed to be available.
Unemployment claims data was released on Wednesday morning. It was revealed that 201,000 claims for benefits were made during the past seven days, which was below the expected 214,000.
The S&P 500 finished 2.66 percent lower this week to close at 5,827. On Monday, the index made a high of 6,019 before reversing and tumbling through Friday morning. Early that day, the market hit its low of 5,817.
As with the S&P, the Dow would also fall by more than 2 percent closing at 41,938. During the shortened trading week, the market ranged from a high of 43,109 set on Monday to a low of 41,889 set on Friday.
Finally, the Nasdaq also fell this week by more than 3.6 percent to close at 19,161. The market would hit its high of the week on Monday afternoon when it reached 19,994. Meanwhile, its low of the week was 19,044 set on Friday morning prior to gaining ground that afternoon.
In international news, Canada also announced jobs data on Friday signaling that the country’s economy may be on the mend. It was revealed that the economy added nearly 91,000 jobs and saw its unemployment rate drop to 6.7 percent compared to an expected 6.8 percent. Australia announced on Tuesday that inflation in the nation was 2.3 percent compared to an expected 2.2 percent on an annualized basis.
The upcoming week will feature the release of price change data on Tuesday followed by CPI figures on Wednesday. Inflation is expected to have increased to 2.9 percent on an annualized basis from 2.7 percent last month. Retail sales data will be released on Thursday in addition to unemployment claims for the past week.