America added far fewer jobs in September than expected, but investors didn’t seem too disappointed: Stocks were mostly unchanged Friday as Wall Street took solace that the unemployment rate continues to drop after the pandemic-fueled spike last year.
The Dow finished the day down nearly 10 points, but it alternated between small gains and declines throughout much of the day. The S&P 500 dipped 0.2% and the Nasdaq fell 0.5% after both also hovered between modest increases and drops. Friday’s slide marked the end of a three-day winning streak for stocks. But all three indexes ended the week solidly in green, with the Dow having its best week since late June. The Dow is now just 2% below the all-time high it hit in August.
Investors seem to recognize that the jobs data will be choppy for the foreseeable future. Even though the September gains were underwhelming, the government’s revised figures for July and August show that more jobs were added than previously reported. And as long as Covid-19 continues to disrupt the labor market, the numbers for the next few months will remain hard to predict. “This is not an economic stall as much as it is a reflection of the Delta variant. Some people view the pandemic as largely over but that’s not true,” said Scott Clemons, chief investment strategist with BBH.
Experts also said the jobs report is unlikely to change the Federal Reserve’s likely plans to announce that it will begin to cut back on, or taper, its monthly bond purchases starting at its next meeting in November. The Fed’s bond buys have helped keep long-term interest rates low in an attempt to stimulate the economy during the worst of the Covid-19 slowdown.