Dow Plummets More Than 600 Points
Updated at 3:21 p.m. ET
Major stock indexes dropped sharply Friday, with the Dow Jones industrial average tumbling more than 600 points amid signs that wage growth is finally picking up.
The 2.4 percent drop in the Dow came as the Labor Department reported 200,000 jobs were added to the economy last month, which was stronger than expected, and the unemployment rate stayed at 4.1 percent — the lowest since 2000.
But worries about inflation grew when the report showed that average hourly wages grew 2.9 percent from a year ago — the largest increase since June 2009. Yields for 10-year Treasurys hit four-year highs Friday.
All this sets the stage for the Federal Reserve to continue raising interest rates, with the next hike expected in March. It sets the stage to make credit cards, car loans and mortgages more expensive.
Carl Tannenbaum, chief economist at Northern Trust, says Friday's employment report shows the economy continues to have a lot of energy.
The higher wage growth and potentially higher inflation "might then lead the Federal Reserve to raise their interest rates more rapidly than the market is comfortable with," he told NPR's John Ydstie.