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Despite Some Good News, US Economy Not at Pre-Lockdown Levels Yet

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Stock indexes were ticking higher on Wall Street on Friday after a report showed the nation’s job market was stronger last month than expected.

The S&P 500 was up 0.3 percent in morning trading and on pace for its seventh straight gain, though slightly more stocks were falling in the index than rising.

The Dow Jones Industrial Average was up 45 points, or 0.1 percent, at 34,679, as of 10:40 a.m. Eastern time. The Nasdaq composite was 0.3 percent higher.

Indexes climbed as soon as trading opened after a U.S. government report said employers hired 850,000 more workers than they cut last month.

It was a healthier reading than the 700,000 economists expected and an acceleration following a couple of months of disappointing growth.

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But the job market still has a long way to go before it gets back to its pre-lockdown strength.

Some took the numbers to mean the Federal Reserve can stay on the course it has set, keeping interest rates low for a while longer to support the economy.

Low interest rates help drive up prices for all kinds of stocks, but they provide particularly powerful fuel for companies whose prices may otherwise look expensive.

That helped push several influential tech stocks higher Friday. Microsoft gained 1.3 percent and Apple rose 1 percent.

Will the economy return to its pre-lockdown levels any time soon?

Because those companies are so big, their stock movements carry extra heft for indexes, and they helped make up for losses by energy producers, financial companies and others.

About 53 percent of stocks in the S&P 500 were falling, as were the smaller stocks in the Russell 2000 index, which dropped 0.9 percent.

Average hourly wages for workers were 3.6 percent higher in June than a year ago, but the rise from May was slightly below economists’ expectations at 0.3 percent.

The Fed has been insisting that the higher inflation hitting the economy will be only temporary. Many investors expect it to announce a pullback in its bond purchases later this year, well before expectations for the Fed to move short-term rates off their record low in 2022 or 2023.

If job growth or inflation is stronger and more persistent than expected, though, it could force the Fed to move up its timetable and raise rates more aggressively.

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Virgin Galactic flew 9.8 percent higher after it said it hopes to launch a test spaceflight on July 11, with its founder Richard Branson on board.

U.S.-listed shares of Didi, a Chinese ride-hailing service, slumped 6.2 percent after China’s internet watchdog said it launched an investigation into the company to protect national security and public interest. Its shares began trading in New York on Wednesday.

In Europe, indexes were mixed. Germany’s DAX returned 0.2 percent, and France’s CAC 40 slipped 0.1 percent, while the FTSE 100 in London was barely changed.

Asian markets were also mixed, with Japan’s Nikkei 225 up 0.3 percent and South Korea’s Kospi nearly flat. Markets in Shanghai and Hong Kong fell more sharply, down 1.8 percent or more.

The Western Journal has reviewed this Associated Press story and may have altered it prior to publication to ensure that it meets our editorial standards.

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