Dow Climbs Over 300 Points as Job Data Shows Promises

Dow Jones and stock futures are charting an impressive trend Friday as the Bureau of Labor Statistics reported its Nonfarm Payroll data which shows a total of 315,000 new jobs were created. The figure is slightly below the estimates from analysts polled by Dow Jones which came in at 318,000.

The market is already reacting positively to the figures with futures tied to the major stock indices all on the rise. The data is making the Dow Jones Industrial Average (INDEXDJX: .DJI) to be leading the current uptrend in the market with a 0.96% growth at the time of writing or 303.04 points to 31,959.46.

The Nasdaq Composite (INDEXNASDAQ: .IXIC) is up 0.99%, adding 117.13 points to close at 11,902.26. The S&P 500 Index (INDEXSP: .INX) also recorded an addition of 36.26 points at a 0.91% upsurge to 4,003.11.

Despite the impressive leaps of these market indices, they all are still bound to close the week at a massive loss as they have been on a bearish sprint for the better part of the week. While the S&P 500 and the Dow Jones are bound to close the week at more than a 1.5% loss, the Nasdaq Composite will be recording a 2.5% slump.

The impressive job data was described by Steve Sosnick, the Chief Strategist at Interactive Brokers as a “Goldilocks” report.

“Not too hot. Not too cold. It’s right around expectations. There’s nothing in here that takes 75 [basis points] off the table,” he said. “A number that is within expectations doesn’t change anything. What we’re seeing now is a relief rally.”

Projecting New Rate Hikes on Bullish Economic Data

Ahead of the September meeting of the Federal Open Market Committee (FOMC), the recently released job data will come in handy as one of the determinants of how aggressive the Fed will be in hiking interest rates.

That the monetary tightening measures of the Federal Reserve will continue is not a question as Chairman, Jerome Powell revealed at the Jackson Hole Summit in August. The market is bracing up for the potential impact and this accounts for why the Dow Jones and the other market indices went on a freefall for the later part of August.

On September 13, the Consumer Price Index (CPI) data will be released, and whatever this data shows will also contribute immensely to determining whether the Feds will resort to the 75 basis points increment this time around.

The target inflationary mark is now pegged at 2-4%, and while this seems like an arduous task considering the 8.5% tag recorded in July, the Federal Reserve has shown it is ready to do all it can to return the economy to a healthy part.

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