Stocks yawn at jobs report news, finish week flat
Stocks ended moderately lower Friday after the key May jobs report came in well below expectations at 38,000 jobs, a downward surprise that marks the second straight month of weak job growth and further muddles the Federal Reserve's timetable for its next interest rate hike.
The unemployment rate dropped to 4.7%.
The Dow Jones industrial average ended down 32 points, or 0.2%. Futures had pointed to a gain of 20 points earlier before the May jobs number came out. The broad Standard & Poor's 500 stock index fell 0.3% and the Nasdaq composite dropped 0.6%.
Economists had expected job growth of around 160,000 in May and the unemployment rate to dip to 4.9%.
Job gains weaken dramatically: Only 38,000 added in May
The Fed hasn't raised rates yet in 2016 but the central bank Chair Janet Yellen and other Fed members have been talking up a rate hike in recent weeks amid an improving job market and economy. The Fed, which has pushed rates near zero during the financial crisis, hiked rates a quarter-point in December, its first increase in nearly a decade.
Heading into the employment report, futures markets are pricing in a 19% chance of a quarter point move at the June 15 Fed meeting and a nearly 60% probability of a rate hike in July, according to CME Group. Now the odds of a June hike are 4% and for July are 34%.
The weak May jobs count could make it more difficult for the Fed to move at the June meeting.