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US markets settle sharply lower on Friday after release of US monthly job report

03 Sep 2022 Evaluate

The US markets erased their early gains and settled sharply lower on Friday with cut of over a percent each following the release of a closely watched Labor Department report. The US employment increased roughly in line with street estimates in the month of August. The report showed non-farm payroll employment rose by 315,000 jobs in August after surging by a revised 526,000 jobs in July. Street had expected employment to increase by about 300,000 jobs compared to the jump of 528,000 jobs originally reported for the previous month. Meanwhile, the Labor Department said the unemployment rate edged up to 3.7 percent in August from 3.5 percent in July. Street had expected the unemployment rate to remain unchanged. The unexpected uptick by the unemployment rate came as the labor force increased by 786,000 persons, more than outpacing the 442,000-person growth in the household measure of employment.

As separate report by the Commerce Department unexpectedly showed a sharp pullback in new orders for U.S. manufactured goods in the month of July. The Commerce Department said factory orders slumped by 1.0 percent in July after surging by a revised 1.8 percent in June. On the sectoral front, pharmaceutical stocks came under pressure, dragging NYSE Arca Pharmaceutical Index down by 1.6 percent. Considerable weakness also emerged among healthcare stocks, as reflected by the 1.5 percent drop by the Dow Jones U.S. Health Care Index. Commercial real estate, transportation and banking stocks also moved to the downside, while gold and energy stocks rebounded along with the prices of the respective commodities.

Dow Jones Industrial Average declined 337.98 points or 1.07 percent to 31,318.44, Nasdaq fell 154.26 points or 1.31 percent to 11,630.86 and S&P 500 was down by 42.59 points or 1.07 percent to 3,924.26.

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