Finance

Stock Market Continues to Slide After US Job Report

MAY 10 2022·Updated DEC 22 2024

Story

Image credit: Samuel Corum/Bloomberg/Contributor via Getty Images

The Facts

Global shares slid for a third day on Mon. after US employment data suggested that the Federal Reserve ("Fed") is likely to further increase rates to combat inflation.
Business Insider
The latest US job report released on Fri. reveals that employers added 428K jobs in April; the average hourly earnings rose 5.5% from a year ago, but the total labor force shrank.
The New York Times
Economists warn that a strong job market and wage acceleration are signals for the central bank to raise interest rates more aggressively. Climbing wages could also fuel inflation as employers pass on the higher employment costs to customers, prompting employees to demand even higher wages.
The New York Times
This comes as the stock market saw a brief gain last week after the Fed raised rates by half a percentage point instead of the 75 basis points some had feared. The following day, the market experienced a dramatic reversal.
ITN
Concerns about China's economy amid COVID lockdowns and the conflict in Ukraine also weigh on global markets.
USA Today
US investors are now awaiting the release of the Consumer Price Index, a key inflation gauge, later this week.
CNN

Sources Split

LEFT

CENTER

RIGHT

ESTAB
CRIT

CENTER

PRO
ESTAB

The Spin

Pro-establishment narrative

The labor market is clearly out of balance and has become "unsustainably hot." Climbing wages and labor shortages will worsen inflation, and the job report only confirms the need to stay on the path of raising interest rates quickly

The New York Times

Establishment-critical narrative

The Fed is quick to label the job market as too hot in order to justify aggressive monetary tightening. The real issue at hand is a lack of adequate policies to increase the supply of qualified workers. The strong job market should be viewed as an asset, not a liability.

Market Watch

Narrative C

Turbulence is expected in the market, and the recent volatility isn't surprising; markets are simply trying to make sense of a policy environment that they haven't seen in decades - namely, rising interest rates and quantitative tightening.