Donald Trump has tweeted his satisfaction after a closely-watched report suggested the US economy was in a healthier place than feared.
At the end of a week dominated by an escalation in the US president’s trade war, which pulled US indices back from record highs, it was revealed that hiring in the American economy jumped to its highest level since January last month.
The numbers in the non-farm payrolls report smashed market expectations on every level.
It showed the US jobless rate falling to 3.5% – matching its lowest level for 50 years.
Stock Markets Up Record Numbers. For this year alone, Dow up 18.65%, S&P up 24.36%, Nasdaq Composite up 29.17%. “It’s the economy, stupid.”
— Donald J. Trump (@realDonaldTrump) December 6, 2019
In all, 266,000 net new jobs were created across the economy. Economists had expected a figure around 180,000.
The Labor Department also reported wages rising by a better-than-expected figure of 3.1% compared with a year earlier.
It also revised sharply higher the number of jobs created in both September and October.
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The report showed a minimal contribution from seasonal workers ahead of Christmas.
The figures were a surprise in that the US central Bank has cut rates three times back-to-back amid signs the US economy was slowing sharply – a consequence of falling confidence and damage from the effects of the trade war with China.
Markets took fright earlier this week when Mr Trump signalled he was in no rush to find a settlementwith Beijing.
He also threatened to open new trade war fronts through tariffs on goods from Argentina, Brazil and France.
But sentiment shot up when the jobs report was published on Friday.
The president tweeted: “Stock Markets Up Record Numbers. For this year alone, Dow up 18.65%, S&P up 24.36%, Nasdaq Composite up 29.17%. “It’s the economy, stupid.”
US stock markets did open almost 1% higher while in London the FTSE 100 built on earlier gains to trade more than 1% up shortly after the numbers were published.
The dollar – also knocked by the trade war developments – rose against a basket of currencies, including sterling which saw its value climb back above $1.31 on Wednesday.
The jobs report was published ahead of the latest meeting of the Federal Reserve’s rate-setting committee next week.
It had already signalled a wait-and-see approach, suggesting no further rate cuts this year as economic growth remained strong despite a slowdown.
Commenting on the non-farm payroll report Neil Wilson, chief market analyst at Markets.com, said: “Should we worry about the Fed pivoting again? I don’t think so and the market clearly thinks the same.
“The Fed can stand this sort of hot reading for a while yet – jobs growth is averaging only 180k this year vs 223k last year.
“And whatever privately you might think about whether the Fed should be maintaining an easing bias in this environment, it’s made it very clear that it will take a sustained and pronounced rise in inflation to warrant a hike.
“The danger is that the jobs numbers start to run so hot that individual members start thinking about hiking again to cool things down.”