College graduates can expect a salary of $80,000. they may be disappointed
New college graduates may need to manage their expectations about how much they can earn in their first job.
Financial markets plunged after better-than-expected U.S. jobs data, setting the stage for the Federal Reserve to raise interest rates sooner than investors expected.
The S&P 500 composite index fell 2.6% to close at 7,384, while the Dow Jones Industrial Average regained nearly 700 points, or 1.4%. The tech-heavy Nasdaq Composite Index fell 4.2%, or more than 1,100 points, to close at nearly 25,709 points.
Meanwhile, the benchmark 10-year U.S. Treasury note rose nearly 7 basis points to around 4.551%. Bond yields, or interest rates, move in the opposite direction to prices, causing investors to sell bonds in an environment of rising inflation.
U.S. employers added 172,000 jobs in May, with a report for the past two months revised upward to show 93,000 more jobs than previously expected, the Labor Department announced Friday.
Following the jobs report, several analysts said a strong economy and rising prices would likely lead to the Federal Reserve raising interest rates sooner rather than later.
On Friday, Liz Ann Saunders, chief investment strategist at the Schwab Center for Financial Research, told USA TODAY that inflation is being driven up by broader forces than just the Iran war. Expect prices to remain high for longer, she said.
If the Fed raises rates, borrowing will become more expensive. Growth-oriented companies that require more borrowing to finance expansion are more vulnerable to a higher interest rate environment. On Friday, two exchange-traded funds (ETFs) that track semiconductor manufacturers fell sharply. The iShares PHLX Semiconductors ETF (SOXX) and Invesco Dynamic Semiconductors ETF (PSI) both fell at least 10%.
Rising prices also reduce the value of bonds that investors buy to generate a steady stream of income.
