Stocks Drop Again as Investors Weigh Latest Jobs Report – The New York Times

by | May 6, 2022 | Jobs

Stocks fell on Friday, ending a wild week that saw the market rally and then collapse in rapid succession, as investors considered the implications of the latest update on the U.S. job market.After dropping close to 2 percent in early trading, the S&P 500 regained some ground and closed trading down 0.6 percent. The index had dropped 3.6 percent on Thursday, largely erasing gains from earlier in the week, including a 3 percent on Wednesday. The index ended the week down 0.2 percent, its fifth consecutive weekly decline — its longest streak of losses since June 2011.Wall Street’s biggest concern this year has been how quickly the Federal Reserve will withdraw its support for the economy by raising interest rates and shrinking its holdings of bonds. The moves make risky investments less appealing, ending years of low interest rates and policies meant to keep cash flowing through the financial system, both of which had helped fuel a massive rally in stocks.On Friday, the Labor Department reported that employers added 428,000 jobs in April, while average hourly earnings rose 5.5 percent from a year ago. While the report showed hiring remains resilient, economists have said that the strong job market and wage acceleration are incentives for the central bank to lift interest rates more aggressively.A particular concern is that climbing wages could fuel inflation, as companies pass on the higher employment costs to customers. That could, in turn, prompt workers to demand even higher wages, triggering an upward spiral. The data released Friday also showed that the labor force shrank unexpectedly in April, a phenomena that could add to the tightness of the job market if it continued.The State of Jobs in the United StatesThe U.S. economy has regained more than 90 percent of the 22 million jobs lost at the height of pandemic in the spring of 2020.April Jobs R …

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