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US stock indexes ended a turbulent trading week on a high note this Friday, buoyed by an unexpected surge in job creation last month. This positive development has reignited debates on Wall Street about the possibility of another interest rate hike by the Federal Reserve this year, even as wage growth continues to slow.
The managed to break its four-week losing streak with a modest weekly gain of 0.5%, while the Dow Jones dipped slightly by 0.3%. On the other hand, the climbed by 1.6%.
The economy added an impressive 336,000 jobs in September, almost double the anticipated figure. However, unemployment remained unchanged at 3.8%, and hourly wages saw a meager increase of just 0.2%, marking the slowest annual growth in eighteen months.
This robust nonfarm payrolls report triggered a fresh wave of selling in the US bond market. As a result, both the 10-year and 30-year Treasury yields increased by 5 basis points. The former reached an intraday high of 5.21%, while the latter touched its highest level since September 20, 2007.
Despite the unexpected job growth, concerns about sluggish wage increases persist. The minimal wage growth could potentially impact consumer spending and inflation, key factors that the Federal Reserve considers when setting interest rates.
The strong jobs report and subsequent rally in the stock market underscore the resilience of the US economy amidst global economic uncertainties. However, the slowing wage growth coupled with rising Treasury yields highlight potential challenges that could influence future monetary policy decisions.
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