Oil prices remained under pressure on worries about oversupply and weak global demand, but gold bucked the trend although by not enough to see the precious metal avoid its longest weekly losing streak since 1999.
The Dow Jones industrial average lost 41 points, or 0.2 percent, to 17,378 as of 10:14 a.m. Eastern.
The Nasdaq composite declined 12.90 points, or 0.3 percent, to 5,043.54.
U.S. employers added 215,000 jobs in July, the Labor Department said Friday, another signal that the job market is steadily improving and providing another key piece of data for the Fed as it assesses whether the U.S. economy can withstand higher interest rates.
That, at least, is the word from most economists.
The number of US jobs probably rose at a healthy pace in July and wages likely rebounded in data due on Friday, providing further signs of an improving economy that could allow the Federal Reserve to raise interest rates in September.
Economic and business tea leaf readers have been trying to figure out the Fed’s timing for its first interest rate hike since 2008.
Not all of them do. Pay increases, for example, are still sluggish. But tightening labor market conditions and decisions by several state and local governments to raise their minimum wage have caused some misguided expectations of a pickup.
European stocks moved up slightly after the data. The Fed dropped rates to historically low levels during the depths of the financial crisis in a bid to stimulate growth and stave off panic. It has not raised rates since 2006. While not as robust as the gains recorded in May and June, Fridays Labor Department report came in within 10,000 jobs of what forecasters had predicted, a notable feat of consistency in an economy that employs almost 150 million people. By contrast, health care had slower growth, adding 27,900 jobs after adding an average of 45,900 jobs the prior three months. “That’s when you saw the greatest improvements in the unemployment rate, the employment-population ratio and labor-force participation”, she said. That’s near the 5 percent to 5.2 percent range that the Fed says constitutes a normal job market. However, it is widely acknowledged that the official unemployment rate is largely fictitious, with the head of the Gallup polling agency going so far as to call it a “Big Lie” earlier this year. More jobs were also added in construction. Of course it would be welcome news if we started experiencing faster job growth or stronger gains in hourly pay for workers.
Investors are looking beyond the first rate hike to where rates will be two, three or four years down the road.. Markets regained some ground in last leg of trade but still closed mostly in red. And, the arguably most important measure for the Fed-nominal average hourly earnings-rose only 2.1 percent over the year, in line with the same slow growth we’ve seen for the last six years. “The findings suggest that a black applicant has to search twice as long as an equally qualified white applicant before receiving a callback or job offer from an employer”, the authors wrote.
The Congressional Budget Office’s forecast is not consoling either, as it expects the number of working Americans to increase more slowly in future decades.