The S&P 500 index edged up 0.3% last week as investors considered the potential effects of weaker-than-expected monthly payroll data. The week’s move came in just four sessions as the U.S. stock market was closed on Monday for Labor Day. The index is now up 10% for the year.
The August employment report Friday morning showed nonfarm payrolls rose by 22,000, well below the 75,000 increase expected in a survey compiled by Bloomberg. While July payrolls had an upward revision to a 79,000 increase, June payrolls were revised downwards to a 13,000 decrease, resulting in a net downward revision of 21,000 jobs.
The unemployment rate rose to 4.3% in August from 4.2% in July, as expected, while the labor force participation rate rose to 62.3% from 62.2% in the previous month and the size of the labor force expanded on gains in both employment and unemployment.
While the weaker-than-expected payrolls added to investors’ concerns about the economy, it also prompted some to increase their bets on the likelihood the Federal Reserve’s monetary committee will resume cutting interest rates at its September meeting.
Communication services led the gainers last week, rising 5.1%, followed by consumer discretionary, up 1.6%. Health care, consumer staples and technology also edged higher.
On the downside, energy fell 3.5%, followed by a 1.7% drop in financials, a 1.1% decline in utilities and a 0.9% slip in industrials. Materials and real estate also edged lower.
Earnings reports are expected this week from companies including Oracle (ORCL) and Adobe (ADBE). Economic data will feature the August producer price index and consumer price index, two closely watched inflation measures.
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