Stocks notch a sixth straight week of gains after November jobs data

Stocks rose Friday, helping all three major indexes log their sixth consecutive week of gains after a rocky start to the month.

For the week, the Dow rose 0.01%. The S&P 500 gained 0.2% to reach its highest closing level in 2023. The Nasdaq Composite added 0.7%.

Stocks teetered on Friday before gaining to finish the session, as investors parsed the latest jobs report. The US economy added 199,000 jobs in November, according to fresh data from the Bureau of Labor Statistics. The unemployment rate slipped to 3.7% from 3.9% the prior month. Economists had predicted net job gains of 180,000 for the month and for the unemployment rate to hold steady.

Wall Street still expects the Federal Reserve to hold interest rates steady at its final policy meeting of the year. Expectations that the central bank will cut rates in March, however, fell to 44% from 55% last Friday.

Investors will be looking to the Fed meeting next week for signals about where the central bank could take rates, after bringing them to a 22-year high.

Crypto-related stocks popped, extending their gains after Bitcoin earlier this week touched its highest level in over a year. Coinbase shares rose 7.7%, Robinhood Markets shares gained 2.2% and Marathon Digital shares added 8.2%.

Carrier Global shares jumped 4.5% after the company said it would sell its global access solutions business to Honeywell. Shares of Honeywell declined 1.7%.

The Dow rose 130 points, or 0.4%.

The S&P 500 gained 0.4%.

The Nasdaq Composite added 0.5%.

As stocks settle after the trading day, levels might change slightly.

Stocks gave up some of their earlier gains on Friday, as Treasury yields rose on the stronger-than-expected labor report.

The Dow rose 40 points, or 0.1%. The S&P 500 gained 0.1% and the Nasdaq Composite added 0.2%.

The yield on the 10-year Treasury note was trading at 4.25%, after the latest jobs reading showed the labor market is staying resilient despite interest rates at a 22-year high.

Still, the S&P 500 remains within striking distance of its 2023 high, as optimism grew on Wall Street that a labor market that stays robust as inflation cools will help the Fed achieve a "soft landing" for the economy, or lower inflation without triggering a recession.

The unemployment rate for Black men older than 19 rose sharply in November as more workers across demographic groups trickled into the job market.

Unemployment among Black men 20 years of age and older rose to 6.4% in November, up from October's 5.3% rate, the Bureau of Labor Statistics reported Friday. For Black women older than 19, the unemployment rate retreated last month after rising steeply in October. Unemployment among Black Americans broadly held steady at 5.8% last month.

Meanwhile, the labor force participation rate, or the share of workers employed or looking for a job, rose across most demographic groups, more so for Black and White men. The participation rate for Black men older than 19 increased to 69.2% in November, up from the prior month's 67.5% rate. The participation rate for White adult men rose to 70.4% from 70% during the same period.

The participation rate of prime-age women, those between the ages of 25 and 54, remained near a record high last month. For women older than 19, the participation rate fell slightly.

Acting Labor Secretary Julie Su told CNN Friday that the November jobs report shows “Bidenomics is working.” 

In an interview on CNN News Central, Su said the November data is “another strong jobs report, indicative of stable and steady growth.”

“Bidenomics is working. We are investing in America, by investing in America’s infrastructure, clean energy, manufacturing and its workers, and labor force participation rate remains robust and this is exactly what we want to see in a strong economy,” Su said.

When pressed on new CNN polling showing that 71% of Americans view the current economic conditions as poor, Su said that she thinks it is a “reflection of the after-effects of the pandemic and the global economic stress that it induced.”

She also said she thought that part of that sentiment was due to people feeling “like the economy has not been fair for too long.”

Americans’ long-run expectations of inflation rates fell in December after reaching their highest level in 12 years in the prior month. That's a relief for the Federal Reserve, which pays close attention to US consumers’ perceptions on prices.

The University of Michigan’s latest consumer survey showed that inflation expectations in the next five years fell to 2.8% in December, according to a preliminary reading, down from November’s 3.2% rate. That matched the second-lowest reading notched since July 2021.

The university's survey also showed that Americans' attitudes about the economy rebounded sharply, soaring by 13% in December from November, "erasing all declines from the previous four months, primarily on the basis of improvements in the expected trajectory of inflation," according to a release.

"There was a broad consensus of improved sentiment across age, income, education, geography, and political identification," said the university's Surveys of Consumers Director Joanne Hsu in a release.

"A growing share of consumers — about 14% — spontaneously mentioned the potential impact of next year’s elections," she noted. "Sentiment for these consumers appears to incorporate expectations that the elections will likely yield results favorable to the economy."

The US economy notched another solid month of job growth, with an added lift from actors and autoworkers coming off the picket lines.

The largest employment gains last month came in health care and government, which added an estimated 93,200 and 49,000 jobs, respectively. Manufacturing saw a boost, too, largely because of the return of striking autoworkers, which lifted motor vehicles and parts employment by 30,000 jobs.

Additionally, the resolution in the Screen Actors Guild strike against Hollywood studios resulted in 17,200 jobs added in the motion picture and sound recording industries.

In total, the BLS was anticipating a net gain of 35,000 workers returning after strikes: The agency estimated that 61,000 workers were absent from the labor market due to labor disputes, versus 96,000 the month before.

Taking into account those one-time gains, the underlying rate of job growth is likely around 160,000 jobs per month, which aligns with the 2019 average, wrote Julia Pollak, senior economist at ZipRecruiter.

A month earlier, those effects swung the other way.

“Some of the weakness last month may have been illusory, just due to the strikes,” Pollak told CNN earlier this week in an interview.

The United Auto Workers union, in an unprecedented and successful action, went on strike against the Big Three automakers of Ford, General Motors and Stellantis from mid-September through the end of October.

October’s employment report included 33,200 jobs counted as lost in the motor vehicles and parts industry. BLS attributed those declines to strike activity: The agency’s strike report for that month counted 25,300 Ford, GM and Stellantis workers on strike.

Additionally, the BLS strike report for November indicated that strikes ended for 16,000 SAG-AFTRA workers after the actors union and Hollywood studios reached an agreement in the early part of last month

The stronger-than-expected gains of 199,000 jobs in November, and the unemployment rate falling back down to 3.7%, should alleviate any concerns of an imminent recession, economists said Friday.

"This is what a soft landing looks like," Joseph Brusuelas, principal and chief economist with RSM US, wrote in a note issued Friday.

Through November, the United States has added 2.58 million jobs, and the unemployment has remained below 4%, while inflation has eased to 3.2% after starting the year at 6.4%, he added.

"This is not a recession but a sustained economic expansion amidst labor market conditions that meet our definition of what constitutes full employment," he wrote. 

The civilian labor force grew by 532,000 workers last month, and the number of unemployed fell by 215,000 people, which helped raise the labor force participation rate to 62.8% (matching a post-pandemic high) and bring the unemployment rate down to 3.7% from 3.9%, according to Bureau of Labor Statistics jobs data released Friday.

"The household survey confirms the strength exhibited by the payroll survey," the Economic Policy Institute's Elise Gould wrote Friday. "Here, we can look under the hood of the labor market data and explore differences by gender, age, and race/ethnicity. As the unemployment rate dropped, the prime-age employment rate ticked up to 80.7%."

Friday's jobs report is unlikely to sway the Federal Reserve, which is holding its policymaking meeting next week. Markets widely expect (with a 98.2% probability) the central bank to hold rates steady, according to CME FedWatch.

Before the Fed issues its latest decision, however, critical inflation data is due: The November Consumer Price Index and Producer Price Index are scheduled to be released on Tuesday and Wednesday, respectively, next week.

President Joe Biden cheered Friday's jobs report, which showed that the labor market remained solid in November.

Employers added 199,000 jobs last month, a robust gain by historical standards, while the unemployment rate dipped to a low 3.7%. The latest labor data released this week shows that America's job market is running at a cooler pace compared to prior years, but remains steadfast in the face of the highest interest rates in 22 years.

"On my watch we have achieved better growth and lower inflation than any other advanced country. A year ago, forecasters said it couldn’t be done," Biden said in a statement on Friday.

Biden also acknowledged that some Americans are still feeling the pinch of high inflation, calling on "large corporations to pass along the savings to consumers" due to recent supply-chain improvements.

"I’m doing everything in my power to bring down prescription drug costs, health insurance premiums and utility bills," he said. "I’m fighting to eliminate junk fees that some banks, airlines, and other companies use to rip off consumers."

Stocks turned higher on Friday as investors continued to parse the hotter-than-expected jobs report.

The Dow rose 85 points, or 0.2%. The S&P 500 gained 0.2% and the Nasdaq Composite added 0.1%.

Investors say that while the labor report was stronger than anticipated, the Federal Reserve is likely still on track to pause interest rates at its meeting next week.

But it does put into question the timing and pace of rate cuts that Wall Street has priced in starting in the first half of 2024.

"Today's jobs report was a non-event. It wasn’t strong enough to bring back the hawks, but also not weak enough to move rate cuts forward," said David Russell, global head of market strategy at TradeStation, in written comments on Friday. "The main risk is that the Fed won’t see any reason to rush rate cuts.”