Dow breaks 29,000 despite sluggish jobs report

Dow Jones index breaks 29,000 for first time ever

The Dow Jones industrial average broke 29,000 for the first time ever Friday, even as new employment data showed disappointing jobs growth.

The blue-chip index hit an all-time, intraday high of 29,009.07, marking a nearly 0.2 percent increase from Thursday’s close, before falling 0.46 percent, or 133.13 points, to close at 28,823.77.

The milestone came despite Friday’s monthly jobs report showing slowing employment growth, with the US economy adding 145,000 gigs in December.

That’s down from November’s revised total of 256,000 and below economists’ expectations that nonfarm payrolls would add 164,000 jobs. The December unemployment rate was unchanged at 3.5 percent, matching a 50-year low.

“All things being equal, it’s a signal that investors are more comfortable with the economy, the decrease in trade tensions and (now) the decrease in Middle East tensions,” Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance, said in a statement.

The stock market returned to its massive rally a week after the US killing of Iranian Gen. Qassem Soleimani briefly rattled investors. The markets have also shown optimism about the US signing a phase-one trade deal with China, which is expected to happen next week.

The US Department of Labor said payrolls grew by 14,000 fewer jobs in October and November than they initially reported. Revisions knocked 10,000 added jobs off November’s initial total of 266,000, while October’s growth number was reduced by 4,000 to 152,000.

Average hourly wages in December grew about 0.1 percent month over month and 2.9 percent over the last year, according to the Labor Department.

The feds put last year’s total job gains at 2.1 million, a significant drop from 2.7 million in 2018. But 2019 was still the ninth straight year in which the economy added more than 2 million jobs amid the longest US economic expansion ever.

“While disappointing on the headline, today’s payroll miss is unlikely to change the outlook for the US economy as the results are consistent with economic output chugging along at trend pace,” said Charlie Ripley, senior investment strategist for Allianz Investment Management.

Much of December’s job growth came in the retail trade sector, which added 41,000 jobs as consumers spent a record amount of money online during the shorter-than-usual holiday season.

The leisure and hospitality industry expanded by 40,000 gigs last month to add a total of 388,000 jobs in 2019, while health care employment grew by 28,000 jobs in December and 399,000 for the year, the Labor Department’s report said.

But manufacturing lost 12,000 jobs last month after adding 54,000 in November following the end of a monthlong strike at General Motors.

The industry added just 46,000 jobs in 2019, down from an increase of 264,000 the prior year, the report said. And the mining sector shed 8,000 gigs in December, putting its total loss for the year at 24,000, according to the Labor Department.

While consumer discretionary spending could slow down amid sluggish wage growth, the jobs report “doesn’t change the Fed’s calculus of staying on hold until inflation moves higher on a persistent basis,” said Quincy Krosby, chief market strategist at Prudential Financial.

The central bank indicated last month that it would hold interest rates steady this year as it expected low unemployment and moderate economic growth.

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Traders on the floor of the New York Stock Exchange
A board above the floor of the New York Stock Exchange shows the Dow Jones industrial average above 29,000.
A board above the floor of the New York Stock Exchange shows the Dow Jones Industrial Average above 29,000.