The US markets closed lower on Wednesday, with the Dow industrials and S&P 500 closing lower for the third consecutive session, as oil prices dropped and a stronger-than-expected report on private-sector employment helped to bolster expectations for an interest-rate hike next week. The Atlanta Federal Reserve’s GDP Now forecast model showed that the US economy is on track to grow at a 1.2 percent annualized pace in the first quarter following the January data on domestic wholesale inventory. The latest first-quarter gross domestic product estimate was lower than the 1.3 percent growth rate calculated on Tuesday.
On the economy front, the increase in productivity among American firms and workers was left unchanged at 1.3% in the fourth quarter, marking the performance in 2016 as the worst in five years. The government’s first revision of fourth-quarter productivity showed little change in output, hours worked or labor costs. The increase in output, or how much goods and services companies produce, was raised to 2.4% from 2.2%. Hours worked rose 1% instead of 0.9%. Productivity increases when output rises faster than hours on the job. Unit-labor costs advanced 1.7%, the same as the government originally reported. That reflects how much it costs a business to produce one unit of output, such as a ton of coal or a bushel of wheat. The private sector recorded the third-best showing for jobs creation during the current economic recovery.
On the other hand, the US added 298,000 private-sector jobs in February, the most since April 2014. The ADP report is based on its own data as a payrolls processor, as well as other calculations it doesn’t make public. The ADP report suggests the official nonfarm payrolls report from the Labor Department, which also covers government jobs, will come in well ahead of the current 200,000 consensus.
The Dow Jones Industrial Average lost 69.03 points or 0.33 percent to 20,855.73, S&P 500 dropped 5.41 points or 0.23 percent to 2,362.98, while Nasdaq was up 3.62 points or 0.06 percent to 5,837.55.
The Indian ADRs closed mostly in red; HDFC Bank was down 0.67%, Dr. Reddy’s Lab was down 0.64%, Infosys was down 0.25% and ICICI Bank was down 0.08%. On the other hand, Tata Motors was up 0.02%.