A surge in U.S. job creation and some reassuring words from the head of the U.S. central bank sent U.S. stocks soaring Friday.
The Labor Department reported a net gain of 312,000 jobs in December, far more than economists predicted. The unemployment rate, however, rose slightly, to 3.9 percent.
Many analysts said the rising unemployment rate was probably good news because rising wages prompted many jobless people to start looking for work.
People are not counted as officially unemployed unless they have searched for work in the past four weeks. In December, the labor force expanded by a healthy 419,000 people as wages rose 3.2 percent over the past year.
PNC Bank Chief Economist Gus Faucher said the data meant worries about a possible recession were probably “overblown.” Worried investors have sent stocks mostly downward in recent months in a series of drastic gains and losses driven in part by concern that the U.S. central bank might raise interest rates too quickly and choke off growth.
Federal Reserve Chair Jerome Powell said Friday that Fed officials were “listening carefully” to markets that were weighing the impact of “concerns on global growth and trade negotiations.”
Dec Mullarkey of Sun Life Investment Management wrote that “markets were reassured” because the Fed made it clear it was not on course to automatically raise rates and would “dynamically adjust as new data and trends emerge.”
By the close of trading, the Dow advanced more than 700 points, as the major U.S. indexes rose more than three percent.