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CNN
 — 

The Dow fell nearly 400 points on Thursday as strong jobs data spooked investors.

A number of reports this week show that the labor market remains resilient to the Federal Reserve’s attempts to tame inflation by raising interest rates and cooling the economy. The reports stoked investors’ fears that the central bank will continue with its painful hiking regimen well into 2023.

The Dow was down 383 points, or 1.2%, in early afternoon trading, the S&P 500 also fell 1.2% and the Nasdaq Composite was 1.3% lower.

Stocks dropped as the ADP private payrolls report showed employers added 235,000 jobs in December, above analyst estimates. Wages also grew faster than estimates. Government data also showed that weekly jobless claims came in below expectations, falling to their lowest level since September and dealing another blow to investors hoping for a less hawkish Fed.

The news follows yesterday’s November Job Openings and Labor Turnover report, or JOLTS, which also came in stronger than expected.

“If you see the indicators in the labor market and if you look at very sticky components of inflation like services inflation, I think it’s clear that we haven’t turned the corner yet on inflation,” Gita Gopinath, the IMF’s second-in-command told the Financial Times this week. The IMF’s advice to the Fed, she said, was to “stay the course.”

Gopinath said her chief concern is the continued resilience of the US labor market, where unemployment remains near historic lows and wage increases remain too high for the Fed to hit its 2% inflation target.

Minutes from the Fed’s December meeting, meanwhile, highlighted that policymakers plan to keep interest rates elevated for some time.

Investors are eagerly anticipating Friday’s jobs report for more data about how the labor market is responding to rate hikes. In today’s bad-is-good economy a weaker jobs report will likely be celebrated.