The battle for safer working conditions for American workers as well as just wages and benefits gave rise to the holiday. The Labor Department, a government agency whose goal is to defend the interests of wage earners, job searchers, and retirees, was eventually established as a result of it in 1913.
With the Federal Reserve pledging to fight excessive inflation until it falls to its 2% annual objective, even if it means more suffering for people and businesses, a hot labor market has been a significant focus in markets this year.
This year, average hourly earnings have increased at a rate of 5% annually (see graph), but not quickly enough to keep up with the inflationary spike, which has only just shown signs of abating due to a drop in energy prices.
This year, worries about a possible U.S. recession and job losses have been prominent, especially given that the Fed is anticipated to raise rates until its policy rate hits approximately 4% or a level that is “restrictive” enough to reduce demand for goods and services. The benchmark rate is currently between 2.25% and 2.5%.
According to FactSet, the stock market has been severely impacted by the uncertain environment, with the Dow Jones Industrial Average down over 13% year-to-date through September 1; the S&P 500 index down about 17%; and the Nasdaq Composite Index down approximately 25% year-to-date.
On the other hand, the 10-year Treasury rate has rebounded to roughly 3.3% after falling to a one-year low of 1.3% last September, according to Dow Jones Market Data, after years of negative global bond yields.
Post offices and banks are closed on Labor Day.
The U.S. bond market, the Postal Service, and many other organizations all close on Labor Day, which is an unusual day off for the stock market. However, employees are still paid for the holiday.
Despite rates being recently put at 5.7%, anyone still seeking a 30-year mortgage should be aware that banks, particularly the major ones like JPMorgan Chase & Co., are closed on Labor Day.
What is the upcoming market holiday? The next significant holiday, Thanksgiving Day, which is observed this year on Thursday, November 24, is a long way off.
The bond market will be closed on Monday, October 10, in observance of Columbus Day, while U.S. stock exchanges will be open.