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U.S. stock indexes finished lower today, Thursday, January 5, on news that pointed to solid job growth and hawkish comments on interest rates from the Federal Reserve.

The Standard & Poor’s 500 closed down 1.16% and the Dow Jones Industrial Average finished off 1.02%. The NASDAQ Com opposite dropped 1.47% and the NASDAQ 100 was lower by 1.59%. The small-cap Russell 2000 closed down 1.09%

The ADP private payrolls report for December showed 235,000 jobs created that month. The total beat expectations among economists surveyed by the Wall Street Journal for a gain of 153,000 jobs for the month. The ADP data doesn’t always track the official jobs report from the Labor Department, due tomorrow, but an ADP report that came in above expectations certainly raises the possibility that tomorrow’s official report will also run hot. A stronger-than-expected labor market increases the chance that the Federal Reserve will continue to raise interest rates. Fed Chair Jerome Powell has said that the labor market must weaken to prevent strong wage gains for workers from fueling inflation.

Another report also pointed to job market strength. Initial jobless benefit claims declined last week to 204,000, the lowest level since September.

And Federal Reserve officials chimed in to emphasize the need for the Fed to stay vigilant on inflation. Kansas City Federal Reserve Bank President Esther George told CNBC that she had raised her forecast for the fed-funds rate to above 5% and expects it to stay there for some time as the central bank continues its fight against inflation. Meanwhile, Atlanta Fed President Raphael Bostic also said on Thursday that the central bank still has “much work to do” to tame inflation.

Those comments outweighed remarks by James Bullard, president of the St. Louis Federal Reserve, on Thursday afternoon that high inflation is likely to recede in 2023. While the benchmark rate is not yet in a zone that may be considered sufficiently restrictive, he added, it is getting closer.