In the old days, a disappointing monthly jobs report like the one we got Friday morning would have given investors pause. This time, they didn’t even blink.
In December the U.S. economy added only 148,000 jobs, a big drop from November’s 228,000. Unemployment stayed at 4.1% and wage growth remained a tepid 2.5% annually.
Maybe that led savvy investors to conclude that the Federal Reserve under new chairman Jerome (Jay) Powell would stick to its roadmap of only three increases in the federal funds rate this year.
Or maybe they didn’t care and just kept buying.
On Friday the S&P 500 index closed—yawn—at yet another all-time record high above 2,700, while the Dow Jones Industrial Average finished above the magic 25,000 threshold again while the Nasdaq Composite index easily topped lucky 7,000 once more. The increase of 2% since trading resumed Tuesday was the best weekly gain in a year.
Is this for real or did investors imbibe too much bubbly on New Year’s Eve?