Donald Trump misses no opportunity to tout how the stock market is doing under his watch. But he probably didn’t want to look at Friday’s figures. The Dow Jones Industrial Average plunged 666 points on Friday–a loss of 2.5 percent. This capped off the Dow’s worst week in two years, and comes just two weeks after it passed the 26,000 mark for the first time in its 122-year history.
Lest you think that investors were spooked over the release of the Nunes memo–which turned out to be a giant nothing burger–they were actually worried about inflation. And that, ironically, was sparked by the January jobs report.
The economy added 200,000 jobs last month, 15,000 more than expected. Naturally, Trump seized on it.
With 3.5 million Americans receiving bonuses or other benefits from their employers as a result of TAX CUTS, 2018 is off to great start!
✅Unemployment rate at 4.1%.
✅Average earnings up 2.9% in the last year.
✅200,000 new American jobs.
— Donald J. Trump (@realDonaldTrump) February 2, 2018
But investors weren’t so pleased by those numbers. Watch CNN International’s Richard Quest chronicle Friday’s carnage here.
Quest noted that the jobs report showed an increase in average wages. Apparently investors fear higher wages could spur inflation, leading the Federal Reserve to raise interest rates again. Investors are also nervous over a lower unemployment rate–4.1 percent, according to the latest report.
Now how much was the wage increase? Drum roll, please–nine cents. For those of you keeping score, that amounts to a rounding error for most employers. But wait a minute. You would think the market would be pleased at these jobs numbers. After all, more people in the work force, as well as higher wages, mean more people are putting more money back into the economy.
One has to wonder if the Walmart mentality is leaking into the rest of the corporate world. Remember, Walmart recently announced that it was giving most of its employees bonuses. But at the same time it shuttered 63 Sam’s Clubs with virtually no warning. It also laid off 3,500 co-managers, giving some of them a chance to reapply as assistant managers at lower pay.
It cannot be stated enough–investors seem to be panicking over a mere rounding error.
(featured image courtesy Ryan Lawler, part of public domain)