US job data disappoints
Today, the US Bureau of Labor Statistics published May’s employment data. While the unemployment rate remained low at 3.6%, the US economy added just 75,000 jobs in May, a sign of an economy in late-stage expansion. Analysts had expected the economy to add 175,000 jobs in May.
Government payrolls declined by 15,000 in May, and 90,000 jobs were added by the private sector. Average house earnings grew by just 0.2% in May over April against the expectation of 0.3%. On a year-over-year basis, average hourly earnings grew 3.1% compared to the expectation of 3.2%.
US indexes and ETFs gain
The bad employment data came as a blessing in disguise for the US indexes. The S&P 500 was up 1.34% at 1:04 PM EST. The SPDR S&P 500 ETF, which tracks the S&P 500 was up 1.31% at the same time. The Dow Jones was up 1.25% at 1:05 PM EST. The SPDR Dow Jones Industrial Average ETF (DIA), which tracks the Dow Jones, was up 1.19% at the same time.
The NASDAQ was the biggest gainer among the three with 1.87% gains at 1:07 PM EST. The Invesco QQQ Trust ETF (QQQ), which tracks the NASDAQ, was up 2.14% at the same time.
Weak employment data may prompt the Fed to cut interest rates to boost growth, employment, and in turn inflation. Markets gained on the bad news due to expectations of a rate cut.