NEW YORK – The U.S. jobs report pushed the stock market forward on Friday, putting the benchmark Dow Jones industrial average above 14,000, a milestone it hadn’t reached since before the financial crisis.
Overall, the government’s jobs report was mixed, but traders chose to focus on the positive. The U.S. said it added 157,000 jobs in January, which was in line with what traders had been expecting. Unemployment inched up to 7.9 percent from 7.8 percent in December. But, encouragingly, the government also reported that hiring over the past two years has been higher than it originally thought.
The jobs number is based on a survey of employers, and the unemployment rate is based on a separate survey of households, which is why they can diverge.
The Dow hasn’t closed above 14,000 since Oct. 12, 2007. That time, more than five years ago, was almost a different era – before signs of the devastating financial crisis were apparent to the average observer.
Lehman Brothers still existed. So did Bear Stearns, Wachovia and Washington Mutual. Housing prices were starting to ebb, but they hadn’t cratered. The unemployment rate was 4.7 percent, meaning jobs were abundant.
It’s not far from its all-time high, 14,164.53, which it reached on Oct. 9, 2007. A year later it had shed nearly 40 percent of its value.
The Dow is an index of 30 big companies, and its purpose is to represent how the broader stock market is faring. It’s more a representation of how traders are feeling about the economy than the economy’s underlying fundamentals, but hitting 14,000 would still be an important psychological milestone.
In Europe, tentative and incremental signs of a recovery were enough to push up stocks in France, Britain and Germany. December unemployment in the European Union was lower than analysts had feared, inflation unexpectedly fell, and a survey raised hopes of some growth in the manufacturing sector.