All of the losses caused by the Brexit that Wall Street experienced were recovered on Friday after data indicated that the United States economy put forth its largest job gains in eight months in June, strongly jumping from very poor figures during the month of May. The economy increase by 287,000 jobs in both public as well as private sectors during the month of June; Originally, economists only expected a growth of 175,000 jobs, according to a poll. This data indicated that the month of May was merely an anomaly rather than a sign of weakness in the labor market.
Unemployment during the month of June increased to 4.9 percent, while economists predicted that it would be at 4.8 percent. Currently, we are still at full employment since that number is under five percent. The data found a week before the Brexit will factor into the Federal Reserve’s plans to increase interest rates, however, traders do not expect them to change anything. The Brexit vote led to a two-day sell off that forced three major indexes to their lowest points in nearly a year during June.
“We’ll have to see how the economy weathers the increase in uncertainty from Brexit and the stronger dollar, but there’s reason to believe the Fed could start talking about a December rate hike,” Brian Jacobsen, chief portfolio strategist at Wells Fargo, said.
The Federal Reserve’s next meeting is going to be on July 26th and July 27th. CME Group’s FedWatch tool indicates that traders believe that there is a 22.8 percent chance of a rate hike during the month of December. At 10:51 a.m. ET (1451 GMT), the Dow Jones Industrial Average .DJI increased 161.69 points, or 0.9 percent, to 18,057.57, the S&P 500 .SPX jumped 22.66 points, or 1.08 percent, to 2,120.56 and the Nasdaq Composite .IXIC grew by 59.47 points, or 1.22 percent, to 4,936.28.