The US stock market will be closed on Monday, September 5 in honor of Labor Day, a national holiday that has been celebrated on the first Monday in September for nearly 130 years.
The holiday grew out of the fight for safer working conditions for American workers and fair wages and benefits. It also eventually led to the creation of the Labor Department in 1913, a federal regulator whose mission is to support the interests of wage earners, job seekers and retirees.
This year, a hot labor market has been a major focus in the markets, especially as the Federal Reserve pledged to fight rampant inflation until it hits its annual target of 2%, even if that means more pain for households and businesses.
Average hourly wage growth has risen 5% year-on-year this year (see chart), but not enough to keep up with the inflation spike, which has only recently suggested easing, with a slump in energy CL00,
Concerns about a possible recession in the US and job losses have been at the forefront this year, especially as the Fed is expected to raise interest rates until its key rate reaches around 4%, or a level sufficiently “restrictive” to control demand for goods and restrict services. The benchmark rate is now in a range of 2.25% to 2.5%.
The uncertain background has weighed heavily on equities, with the Dow Jones Industrial Average DJIA,
down nearly 13% from the year to September 1, the S&P 500 index SPX,
down about 17% and the Nasdaq Composite Index COMP,
about 25% lower on the year, according to FactSet.
To see: What history says about September and the stock market running out after the summer bomb
On the other hand, after years of negative global bond yields, the reversal of easy money policy has led to the 10-year Treasury yield TMUBMUSD10Y,
to bounce back to nearly 3.3%, after falling to a year-on-year low below 1.3% in September last year, according to Dow Jones Market Data.
Banks, post office closed for Labor Day
While Labor Day marks a rare day off for the stock market, the U.S. bond market, the Postal Service, and many businesses also close for the day, but pay staff for the holiday.
For all the home hunters still looking for a 30-year mortgage despite rates recently locked at 5.7%, know that banks, including the big ones like JPMorgan Chase & Co. JPM,
also closed for Labor Day.
What’s the next holiday for markets? It’s a long wait for the next big one: Thanksgiving Day, which falls on Thursday, November 24 this year.
Although the Columbus Day bond market kicks off as a recommended holiday on Monday, October 10, US stock exchanges remain open.