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Stocks are tumbling after the jobs report
(Reuters/Amr Dalsh)
Visitors react on the rock as a man jumps into the water, above Cleopatra's Beach, on a summer’s day before the start of the holy month of Ramadan, which begins on June 18, at the Mediterranean city of Marsa Matrouh, northwest of Cairo, Egypt.
Stocks are sharply lower on Friday after the jobs report showed fewer jobs were added than expected while the unemployment rate fell to 5.1%, the lowest level since April 2008.
In August, 173,000 jobs were created in the US economy, fewer than the 217,000 was expected by economists.
Stocks tumbled to their lowest levels of the day in early afternoon trade, and briefly, the Dow fell below 300 points. Near 12:27 p.m. ET, the Dow was down 295 points, the S&P 500 was down 30 points, and the Nasdaq was down 54 points. All 30 stocks on the Dow were in the red.
These amounted to about a 1% drop for the three big indexes, which closed nearly flat on Thursday. They are now on track to close lower for the week.
Markets were pricing a 32% probability that the Fed could move this month, down from about 50% two weeks ago. The unemployment rate, however, is now inside the range at which the Federal Reserve considers "full employment."
In a speech Wednesday night, Minneapolis Fed president Narayana Kocherlakota warned against raising rates too soon, arguing that a hike would push inflation further away from the Fed's 2% target. Kocherlakota is, of course, not an FOMC member, and he has been a strong proponent of keeping rates lower for longer.
Friday morning, however, Fed hawk Jeffrey Lacker argued in a speech that the case had already been made for the Federal Reserve to raise interest rates: The time is now.
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