The S&P 500 index has surged roughly 4.6% since election night on Nov. 5, with investors bullish on President-Elect Donald Trump and the economy’s prospects. However, a new jobs report tomorrow could have significant implications for the market.
According to the U.S. Bureau of Labor Statistics (BLS), the November jobs report will reveal how many jobs were added in the prior month, the unemployment rate, and other key statistics like wage growth. Consumer spending accounts for nearly 70% of the US economy, making the labor market a vital driver of consumer health.
Unemployment has trended lower recently, but some economists and investors remain perplexed by this development. The Federal Reserve’s decision to lower interest rates after intense hikes may have contributed to the recent rally. However, if the economy remains strong, the Fed may reconsider lowering rates or reduce the frequency of rate cuts to prevent inflation.
The jobs report tomorrow will provide crucial insight into the Fed’s next move at its meeting on Dec. 17-18. Traders expect a possible rate cut, with 65% predicting another quarter-point reduction and 29% expecting a 75-basis-point decrease by the end of 2025. Investors should be cautious, as any unexpected data could send the market reeling.
Key takeaways from the November jobs report include:
* Expected job additions: 200,000
* Projected unemployment rate change: +0.1%
* Projected year-over-year hourly wage growth: +3.9%
Investors should remain vigilant and prepared for potential market swings. While a strong jobs report may suggest further Fed cuts, investors should be aware of the risks involved in reacting to this news. Long-term investors can focus on being informed about market trends, rather than trying to trade on this report.
Source: https://www.fool.com/investing/2024/12/05/why-friday-could-be-a-big-day-for-the-stock-market