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- US equities spiked on Friday after the Bureau of Labor Statistics announced an unexpected decline in unemployment and net job creation in May.
- The nation’s unemployment rate dropped to 13.3% last month from 14.7%, trouncing economists’ projections of a 19% rate.
- US employers added 2.5 million payrolls in the period, stunning experts who expected 7.5 million lost jobs.
- The hugely optimistic figures support investors’ hopes for a swift economic rebound through the second half of 2020.
- Oil rose after OPEC+ reached a tentative agreement to extend its record production cuts for at least one month.
- Watch major indexes update live here.
US stocks soared on Friday after the May jobs report revealed an unexpected drop in unemployment and net job creation.
The unemployment rate declined to 13.3% in May from 14.7%, the Bureau of Labor Statistics said, despite forecasts of a 19% rate. US employers added 2.5 million payrolls through the month, while economists had anticipated 7.5 million lost jobs.
The May gain marked the nation’s biggest single-month jobs increase since 1939.
Here’s where US indexes stood at 2:05 p.m. on Friday:
- S&P 500:3,202.74, up 2.9%
- Dow Jones industrial average:27,215.97, up 3.6% (934 points)
- Nasdaq composite:9,826.03, up 2.2%
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The report gave investors hoping for a rapid labor-market recovery their most optimistic sign yet. Unemployment-claims data released on Thursday suggested that joblessness was still on a downward trend, with 1.9 million Americans filing for unemployment benefits last week. Wednesday’s ADP report beat economists’ expectations but still showed 2.76 million jobs lost last month.
Friday’s report hinted that widespread stimulus and economic reopenings had acted faster than anticipated to lift the US from its deep recession.
“Jobless claims and ADP data have all pointed to an increase in the unemployment numbers, so these numbers will need to be digested,” said Seema Shah, the chief strategist at Principal Global Investors. “But certainly the initial signs suggest that the reopening of economies has already started to heal the labour market.”
Oil prices rose on Friday after OPEC+ arrived at a tentative agreement to extend its record production cuts. The global coalition is set to meet on Saturday and maintain its cuts for at least one more month after days of compliance disputes.
West Texas Intermediate crude jumped as much as 5.8%, to $39.57 per barrel, on the news. Brent crude, the international benchmark, soared 6.2%, to $42.48, at intraday highs.
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Friday’s gains capped a resoundingly positive week for US stocks. Equities surged through June’s first sessions as positivity about economic reopenings outweighed escalating US-China tensions and US protests against police brutality.
Stocks dipped slightly on Thursday on the news that unemployment claims remained elevated and continuing claims landed above economists’ expectations. Still, the tech-heavy Nasdaq 100 leaped to a record high in the session, becoming the first major US index to fully erase its coronavirus-related losses.
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