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Stocks Hit Record Even as Jobs Report Disappoints

A surprisingly weak report on hiring in the United States rippled through financial markets on Friday, with the data deflating investors’ concerns that the economy could overheat as it recovers from the coronavirus pandemic.

Employers added 266,000 workers last month, the government said, far below economists’ expectations of an increase of nearly 1 million new positions. The report also revised March’s job gains lower.

As the economy has rebounded from last year’s shutdowns, investors have grown worried this year that the Federal Reserve might be prompted to remove some of its emergency assistance for the economy — by raising interest rates or cutting back on its bond-buying program — sooner than anticipated. One reason the Fed would have to do that, some economists have argued, is that the rapid growth could trigger inflation that the central bank can’t tolerate.

But Friday’s data bolstered the counterargument: The recovery is far from complete. “This is a highly uncertain environment that we’re in,” Neel Kashkari, the president of the Federal Reserve Bank of Minneapolis, said in a Bloomberg Television interview shortly after the report was released. “We have a long way to go, and let’s not prematurely declare victory.”

Yields on government bonds, a primary barometer of investors’ outlook for economic growth and monetary policy, tumbled to as low as 1.46 percent in the minutes after the report before recovering to earlier levels. An index of the U.S. dollar dropped to its lowest level since February.

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