* June nonfarm payrolls up by 222,000 vs. est. 179,000
* Unemployment rate edges up to 4.4 pct from 4.3 pct in May
* Average hourly earnings rise 0.2 pct vs est 0.3 pct
* Indexes up: Dow 0.23 pct, S&P 0.27 pct, Nasdaq 0.45 pct
(Updates to open)
By Tanya Agrawal
July 7 (Reuters) – Wall Street was higher on Friday after
the U.S. economy created far more jobs than expected in June,
underscoring labor market strength that could make the case for
a third interest rate hike this year despite benign inflation.
Nonfarm payrolls increased by 222,000 jobs last month, data
from the Labor Department showed, beating economists’
expectations for a 179,000 gain.
Average hourly earnings rose 0.2 percent in June after
gaining 0.1 percent in May, but fell below the estimated 0.3
While the unemployment rate rose to 4.4 percent from a
16-year low of 4.3 percent, that was because more people were
looking for work, a sign of confidence in the labor market.
“The topline number is quite strong. We saw positive
revisions to the previous month and the average for this year is
consistent with the average employment per month from last
year,” said Michael Arone, chief investment strategist at State
Street Global Advisors.
Investors are focused on wage growth and whether spending by
consumers will be strong enough to back the Fed’s rate hike
Odds of a rate hike at the Fed’s December meeting stood at
50.6 percent, according to the CME Group’s FedWatch tool.
Policymakers have taken opposing views on inflation after it
retreated below the central bank’s 2 percent target in May,
creating uncertainty over the future path of rate hikes.
Adding to the jitters are bets that the world’s major
central banks are moving closer to unwinding their ultra-loose
At 9:33 a.m. ET (1333 GMT), the Dow Jones Industrial Average
was up 49.53 points, or 0.23 percent, at 21,369.57, the
S&P 500 was up 6.67 points, or 0.27 percent, at 2,416.42.
The Nasdaq Composite was up 27.33 points, or 0.45
percent, at 6,116.80.
Ten of the 11 major S&P sectors were higher, with the tech
index’s 0.49 percent rise leading the gainers. The
financial index rose 0.47 percent.
Shares of Bank of America, JPMorgan,
Citigroup and Goldman Sachs rose about 0.8 percent
in premarket trading.
Oil fell more than 2 percent after data showed U.S.
production rose last week just as OPEC exports hit a 2017 high.
Oil prices are down more than 16 percent this year, adding to
low inflation concerns.
The energy sector fell 0.2 percent and was the only
Tesla edged up 0.8 percent after the luxury
electric carmaker won an Australian contract to install the
world’s biggest grid-scale battery. Tesla’s shares have fallen
about 15 percent this week following the company’s
Advancing issues outnumbered decliners on the NYSE by 1,468
to 943. On the Nasdaq, 1,366 issues rose and 676 fell.
(Reporting by Tanya Agrawal in Bengaluru; Editing by Anil