Investors welcomed a "Goldilocks" November jobs report that painted a picture of steady economic growth without stoking inflation fears. The U.S. economy added 227,000 jobs last month, surpassing expectations of 220,000, with 32,000 positions, including Boeing's (BA) post-strike recovery. This performance boosted major indexes, with the Dow Jones Industrial Average (DIA, Financial) gaining 0.3%, the S&P 500 (SPY, Financial) rising 0.2%, and the Nasdaq (QQQ, Financial) up 0.3%. The unemployment rate ticked up to 4.2%, its highest in three years, signaling a slight cooling in the labor market but not enough to derail optimism.
The report reinforced hopes for a Federal Reserve rate cut later this month, with traders now pricing in an 88% chance of a quarter-point reduction. The data showed a labor market strong enough to support growth but not overheated, giving the Fed room to act. Sectors like healthcare and leisure led the hiring, while wage growth held steady at 4% year-over-year. Labor force participation, however, dropped to 62.5%, its lowest level since May. These mixed signals were enough to keep markets upbeat, with Treasury yields slipping and stocks pushing higher as confidence in the Fed's dovish stance grew.
As the S&P 500 inches closer to record highs, all eyes are on upcoming inflation data and the Federal Reserve's December meeting for further clarity on the economic outlook. The takeaway? The economy is holding steady, the Fed is ready to step in, and investors are positioned to end the year with a smile.
