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A Chipotle restaurant in Cambridge, Massachusetts, advertises that it is hiring people on August 28, 2023.
Brian Snyder | reuters
This report is from today’s CNBC Daily Open, our new, international markets newsletter. CNBC Daily Open provides investors with everything they need to know, wherever they are. like what you see? you can subscribe Here,
more jobs but more unemployment
US non-farm payrolls increased by 187,000 for August, topping estimates of 170,000. However, the unemployment rate rose to 3.8% from 3.5% last month, the highest since February 2022. Average hourly earnings grew 4.3% year over year, below forecasts of 4.4%. Combined with revised data for June and July, these are clear signs that the US job market is slowing.
winning week for the markets
US stocks cheered a moderate jobs report and mostly held on to gains on Friday, helping major indices post their best week in months. European markets traded mixed. The regional Stocks 600 closed flat, the UK’s FTSE 100 rose 0.34% but other major stock markets ended the day in the red. For August, the Stoxx 600 declined 2.8%.
Tesla’s price cut affected the shares
Tesla shares fell 5% after the company cut prices of its electric vehicles in both the US and China. Additionally, the price of Tesla’s full self-driving software, its premium driver assistance option, was reduced by $3,000. CEO Elon Musk has previously said that the price will increase anytime. Despite the decline, Tesla shares are still up nearly 100% this year.
JP Morgan Chase and Jeffrey Epstein
A lawyer for the US Virgin Islands told a federal judge that JPMorgan Chase reported more than $1 billion to the US Treasury Department in transactions related to “human trafficking” by Jeffrey Epstein. Virgin Islands attorney Mimi Liu said those transactions date back 16 years and were only reported after Epstein was arrested and killed himself in prison in 2019.
[PRO] slow start to september
US markets are closed on Monday for Labor Day and economic data coming this week are light. The heavy hitters, such as the consumer and producer price indices, will be released only towards the end of the month. So keep an eye out for these signs that will indicate whether stocks will fall victim to a September seasonal hit – historically the month has been the weakest for stocks.
The US economy added more jobs than expected in August, but the overall unemployment rate rose. This may seem counterintuitive because it is natural to assume that an increase in the number of jobs will result in a decrease in unemployment. But there is a simple explanation for that.
By definition, the unemployment rate is expressed as a percentage divided by the number of unemployed people (people who do not have a job but are actively looking for a job) by the labor force (the sum of both employed and unemployed). goes.
If the unemployment rate rises, it means that the proportion of people looking for jobs has increased compared to the total labor force. It’s pretty straightforward. The rise in the unemployment rate means that there were more than 187,000 jobs added in August, which means that there were more people starting to look for jobs than finding jobs. The implication: The total labor force increased in August.
A growing labor force is a loose job market. This probably contributed to the lower-than-expected wage increase last month. As Stephen Juno, a US economist at Bank of America, wrote, “The broad message here appears to be that we are nearing full employment, with supply and demand coming into greater balance.”
This will come as a relief to Federal Reserve officials concerned about a hot jobs market contributing to inflation. Investors also appreciated the jobs report. According to the CME Fedwatch tool, he thinks there is a 93% chance the Fed will keep rates unchanged at the September meeting and a 65.3% chance at the November meeting. This is up from 80% and 44.5% respectively a week ago.
Major indices also rose in response to the jobs report. The S&P 500 climbed 0.18% on Friday, marking a 2.5% gain for the week — its best weekly performance since June. The Dow Jones Industrial Average closed the week up 1.4%, up 0.33%. The Nasdaq Composite was essentially flat but ended the week up 3.3%. This was the best performance for both the indices since July.
US markets are closed today, so we’ll have to wait to see if they can keep up this momentum and discredit September’s reputation as the worst month ever for stocks.
— CNBC’s Jeff Cox contributed to this report
Correction: This article has been updated to reflect the correct month of the jobs report.
Source: www.cnbc.com
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