U.S. nonfarm payrolls beat expectations: here’s what it means for stocks
S&P 500 is up nearly 1.0% on Friday after the Bureau of Labour Statistics said the U.S. economy added more than expected jobs in May.
Key figures in May jobs reportCopy link to section
Nonfarm payrolls increased by 339,000 last month – well above 190,000 that economists had forecast. Job growth in the United States have now been positive for 29months straight.
Unemployment, though, climbed to 3.7% in May versus 3.5% expected. But LPL Financial executives Adam Turnquist and Jeffrey Buchbinder also see other reasons to believe that the benchmark index could unlock further upside moving forward.
Through the 100th trading day (May 25th), the S&P 500 gained a solid 8.1%. If we look at similarly strong starts to year, the average gain the rest of the year has been quite strong at 9.4%.
What else could propel the S&P 500?Copy link to section
Other notable data published today include average hourly earnings that were reported up 0.3% for the month – in line with expectations.
Versus last year, that metric printed at 4.3% or 10 basis points below the forecast. Explaining what else could contribute to a further gain in the S&P 500, the LPL strategists said in a recent note obtained by Invezz:
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
Earnings power of corporate America is greater than anticipated which could support stocks in weeks ahead, particularly if timetable for a potential, mild recession continues to get pushed out.
They, however, agreed that risks remain as well, including bad breadth; much of the strength in the equities market this year has been attributed to six mega-cap stocks only.