Stock Climbs After Job Report

For a second straight session, stocks declined as Wall Street became nervous about the upcoming impact to the economy from the government's November jobs creation report. This is typically the case when the monthly employment report comes around.

Despite the nervousness of stock brokers the number of those seeking unemployment dropped by the largest amount in the last six months. Investors were concerned that the economy was losing steam too quickly because of a jump in jobless claims before this.

The job market plays a large role in the economy since it helps to safeguard consumer spending. However, stock brokers also have the concern that businesses will not be able to hire and retain enough workers when the employment levels get too high. It is hard for the central bank to find justification for cutting short-term interest rates when wages are seeing an increase. Around the holidays the labor market sees the largest fluctuations and the job report from the Labor Department helps to clarify this.

Once the job report shows that employment was robust while heading into the holiday season then moderate advanced as made on the stock market. For the week all the major indexes has reported gains as the investors welcomed the government job report. The job report helped reduce investors nervousness that the dollar was about to drop.

The government job report helps investors to ease their concerns towards spending and inflation. Through the holidays consumers will feel better about spending so long as employment remains strong. However, if employment rises too quickly then the Federal Reserve may not be likely to cut short-term interest rates.