New York (CNN Business)The jobs recovery may be losing steam. But the unemployment rate continued to fall, and workers are still bringing home bigger paychecks. Investors don’t seem sure what to think about those mixed messages. Stocks closed lower Friday after the US government reported that just 199,000 jobs were added in December, significantly less than economists expected. The Dow fell about 5 points, ending the day flat after giving up earlier gains.
The S&P 500 ended down 0.4% and the Nasdaq fell 1% to close a choppy trading day. Both indexes had opened the session higher.
Although the headline jobs numbers were disappointing, the government also said that wages rose 4.7% over the past 12 months. That could bode well for consumer spending, even as it may also be raising fears that the Federal Reserve will step up plans to raise rates in order to fight inflation.
“Wage growth being strong and the unemployment rate declining more than expected puts the Fed on a more hawkish trajectory with rate hikes,” said Yung-Yu Ma, chief investment strategist with BMO Wealth Management. “The economy is closer to full employment and the market is coming to terms with the implications of that.”
