(Reuters) - U.S. stocks gained on Friday after payrolls data showed strong job additions in February, but muted wage growth indicated a gradual rise in inflation that tempered expectations of faster interest rate increases.
Nonfarm payrolls jumped by 313,000 jobs last month, the Labor Department said, its biggest increase in more than 1-1/2 years.
Average hourly earnings edged up four cents, or 0.1 percent, to $26.75 in February, a slowdown from the 0.3 percent rise in January. That lowered the year-on-year increase in average hourly earnings to 2.6 percent from 2.8 percent in January.
“The great news is the labor participation rate went up, the headline numbers are great, and the average hourly earnings has settled back down into consensus,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
“It’s a great report across the board and I think that moves markets higher.”
Strong jobs data last month fueled speculation that higher wages could lead to faster interest rate increases by the Federal Reserve and make borrowing expensive, rattling global equities market.
However, the slow wage growth in February could temper expectations that the Fed will change its rate forecast to four hikes this year from three.
The bull market for stocks turned nine years old on Friday and, despite being long in the tooth, appears poised to set the record as the longest in history, buoyed by global economic growth and stronger company earnings.
The Nasdaq Composite .IXIC was up 41.94 points, or 0.56 percent, at 7,469.89.
U.S. Treasury yields hit session peaks after the data, although the rise could be limited by slowing wage inflation.
Signs of a potential breakthrough in nuclear tensions in the Korean peninsula also lifted sentiment, with world markets hitting one-week highs on Friday.
U.S. markets closed higher on Thursday after President Donald Trump appeared to soften his stance on heavy import tariffs on steel and aluminum.
Worries that the tariffs on steel and aluminum could ignite a global trade war had roiled markets since last Thursday, with the exit of chief economic adviser Gary Cohn intensifying the concerns.
Among bigger movers, discount retailer Big Lots (BIG.N) slid 9 percent after posting a surprise drop in same-store sales and forecasting a weak profit for the current quarter and the full year.
Shares of toymakers Hasbro (HAS.O) and Mattel MAT.N were lower after sources told Reuters that retailer Toys ‘R’ Us is preparing for a potential liquidation.
Tesla (TSLA.O) fell 1.2 percent, following the exit of Chief Accounting Officer Eric Branderiz