Disappointing labor market data did not stop the trend of rising stock prices on Wall Street, as investors concluded that the U.S. economy is indeed recovering, leading the major indices to strengthen slightly.
The Dow Jones index rose by 11 points, or 0.11 percent, to 10,618 points, while the S&P 500 index increased by 0.29 percent, to 1,144 points. The Nasdaq index jumped by 0.74 percent, to 2,317 points. For the Dow Jones and S&P 500 indices, these are the highest levels in the last 15 months, and for the Nasdaq, in 16 months. The long-awaited report showed that in December of last year, 85,000 Americans were left without jobs, significantly more than the 8,000 that analysts had expected. Meanwhile, the unemployment rate remained unchanged at 10 percent. However, in this weak report, investors found encouragement in the revised data for November, which indicated that the number of employed increased by 4,000 that month, marking the first monthly increase in employment since the recession began two years ago.
"We should not expect the economic recovery to follow a straight upward line. The revised data for November showed an increase in employment, so I expect the revised data for December to be somewhat more positive. After all, just a year ago, we were losing 600,000 to 700,000 jobs per month," says Linda Duessel, an analyst at Federated Investors. She also points out that the recovery of the labor market usually lags behind improvements in other sectors, so yesterday’s poor data cannot undermine the belief that the economy is recovering.
