NEW YORK – Wall Street struggled to the finish Friday, closing out the week barely changed after a sharp dip in monthly job growth left investors confused about the economy's health.
The Labor Department said employers added 75,000 jobs in May versus a 126,000 gain for April. But while the less-than-forecast increase was a sign of tapering economic growth — which could prompt the Federal Reserve to stop lifting interest rates — the mild figure raised questions about whether the economy was moderating too quickly.
The Dow Jones industrial average dropped 12.41, or 0.11 percent, to 11,247.87. The Dow rose 166 points on Wednesday and Thursday.
Broader stock indicators fluctuated. The Standard & Poor's 500 index edged up 2.51, or 0.2 percent, to 1,288.22; the Nasdaq composite index fell 0.45, or 0.02 percent, to 2,219.41, but remained positive for the year.
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Gregory Miller, chief economist for SunTrust Banks, said the jobs report bolstered beliefs that the economy would continue cooling off, but also fed expectations that high energy costs will begin driving up prices elsewhere. He noted the Fed's challenge of striking a balance on lending rates so businesses can continue funding expansion.
"I think we're at a point now where going too far is a feasible risk," Miller said of the Fed's program of rate hikes, which increases the cost of borrowing money. "We're running the risk of a potential credit crunch. We haven't seen that yet, but with these conditions, it's virtually unavoidable."
However, a mild uptick in wages somewhat helped the inflation picture after the department on Thursday scaled back first-quarter growth in employers' labor costs. Average hourly earnings rose 0.1 percent, compared with estimates of 0.3 percent.
Some stocks found support from the New York Stock Exchange's planned acquisition of stock exchange operator Euronext NV, but climbing oil prices and more losses for the U.S. dollar weighed on the market.
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