CNBC’s Jim Cramer on Friday said that the January jobs report shows that the economy will remain resilient, despite the Federal Reserve’s rate of interest hikes.
“If the Fed Chief wants to lift rates of interest quarter after quarter, this economy can actually handle it. And that is the true takeaway from this amazing job growth number,” he said.
The U.S. economy added 517,000 jobs in January, crushing the Dow Jones estimate of a 187,000 gain. That marks the largest increase in nonfarm payrolls since July 2022.
Stocks teetered on the news but ultimately slipped to finish the trading session. The S&P 500 fell 1.04%, while the Nasdaq Composite declined 1.59%. The Dow Jones Industrial Average shed 0.38%.
Cramer said that while stocks fell since the market is in “excellent news is bad news” mode – the stronger the economy is, the more the Fed will likely must raise rates of interest – the market still held up, kind of.
“My take is that the comeback from the initial negative response within the stock market today, before a move lower within the afternoon, has to do with faith. Faith in pondering that there won’t be a recession. Faith that if the Fed desires to hit us with one or two more rate hikes, we’ll be high quality,” he said.
The strong economic data comes after the Ate up Wednesday raised rates of interest by 1 / 4 percentage point. Chairman Jerome Powell signaled that the central bank is not done raising rates despite economic indications that inflation is cooling down.
Cramer said that while the Fed still desires to tamp down inflation more, he believes a severe recession is “near inconceivable” with job growth being so strong.
“Anyone who thinks the Fed may have to swiftly cut rates later this 12 months since the economy’s too weak [is] clearly fooling themselves,” he said.
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