The government reported Friday that the unemployment rate fell to a five-year low of 7 percent in November and investors rallied. The Standard & Poor’s 500 index jumped enough to erase nearly all of its losses for the week – it closed down marginally, less than 0.1 percent.
Investors have generally responded favorably to monthly employment data this year, even with so many uncertainties surrounding the job market. In the last 12 months, the stock market only declined following the release of the March jobs report when employers added 88,000 jobs. The economy then added an average 159,000 jobs a month from April through July, and an average 204,000 from August through November.
Strong hiring is welcome news for investors, but disappointing jobs numbers have also caused the market to rise this year. That’s because a stronger economy fueled speculation that the Federal Reserve might scale back its economic stimulus sooner rather than later. Investors will be watching closely when the Fed meets on December 17 and 18.Associated Press
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