Stocks rose Friday after a considerable slowdown in a U.S. labor market recovery boosted chances of more economic stimulus from Congress.
The Dow Jones Industrial Average rose 177 points, or 0.59%, to 30,147, the S&P 500 gained 0.68% and the Nasdaq was up 0.53%.
The Dow and S&P 500 traded at record intraday highs during the session.
The U.S. economy added 245,000 jobs in November, well below economists’ estimates of 450,000, as hiring in the private sector and in retail slowed ahead of the key holiday shopping period. The jobs gains last month were the smallest since May.
The unemployment rate fell to 6.7% in November, matching forecasts.
The labor market figures suggested that a recent surge in Covid-19 cases and lockdown orders in such states as California and New York could trigger further job market weakness through to the end of 2020.
“Friday’s report confirms that the recent labor market recovery is decelerating,” saidÂ James McDonald, CEO and chief investment officer of Los Angeles-based Hercules Investments. “With escalating Covid-19 cases and enforced shutdowns here to stay through the winter, business executives see the writing on the wall and have fallen back on layoffs to cut costs.”
McDonald added that a recovery in the jobs market was “over until the winter wave of Covid-19 is behind us.Â
“Vaccine deployment will not happen in time to prevent layoffs both from small businesses and major multinational companies,” he said.
Brad McMillan, chief investment officer at Commonwealth Financial Network, called the payrolls report a “wake-up call for the Congress and should support more federal stimulus.”
To that end, chances have increased that Congress could reach a stimulus agreement by the end of 2020.
Senior Republicans have warmed to the idea of using a $908 billion proposal from a bipartisan group of lawmakers as a basis for a relief deal, Bloomberg reported. The proposal has been endorsed by Democratic leaders but hasnâ€™t been publicly supported by GOP Senate Majority Leader Mitch McConnell.
â€œThis latest jobs report shows the need for strong, urgent emergency relief is more important than ever,â€ Senate Minority Leader Chuck Schumer said in a statement. â€œSenate Republicans are increasingly understanding this urgency, and Leader McConnell should hear their pleas as well as those of the millions of struggling American families.â€
â€œThis jobs report is blaring warning that a double-dip recession is looming and must be a wakeup call for anyone who is standing in the way of true bipartisan emergency relief,â€ he added.