US jobs data boosts Wall St shares

• Hopes that US economy is on course for recovery • FTSE shrugs off blow to UK manufacturing Shares have risen to their highest level on Wall Street since June 2008 after a spurt in job creation boosted hopes that the US economy was on course for recovery. News that non-farm payrolls had expanded by 216,000 last month led to a fresh wave of buying in New York and encouraged the London market to shrug off evidence that the UK’s manufacturing sector had eased back in March. The FTSE 100 Index closed more than 101 points up on the day at 6009.92, its biggest one-day jump since early January, despite a fall in the monthly health-check of the industrial sector conducted by CIPS/Markit. The manufacturing purchasing managers’ index dropped from 63.3 to 58.8, to leave it at its lowest level since October, with a sharp fall in new orders coupled with the strongest upward pressure on the price of goods leaving factory gates in the survey’s 12-year history. Marie Diron, economic adviser at Ernst & Young, said: “The sharp fall in the manufacturing PMI is worrying. Although the survey remains at relatively high levels and some correction was expected, this month’s sharp decrease raises doubts about the sustainability of the recovery in the manufacturing sector. The monthly fall is within the range of monthly ‘noise’ for this survey and we will be waiting for confirmation (or reversal) in April to draw firmer conclusions about the outlook.” In Washington, official data came in better than the markets had been expecting, leading to a 100-point jump in the Dow Jones average in early trading and speculation about when the Federal Reserve might start to raise interest rates. On the currency markets, the dollar gained against both the euro and the pound. Dealers had been forecasting a 190,000 increase in payrolls, but the figures showed that the economy created an additional 17,000 jobs in manufacturing, 18,000 in retailing, 45,000 in education and health and 37,000 in leisure and hospitality. The unemployment rate fell for a fourth month, from 8.9% to 8.8%. Paul Ashworth, US analyst with Capital Economics, said: “Conditions in the US labour market are finally starting to show signs of meaningful improvement. The only weakness was a trivial 1,000 dip in construction employment and a 15,000 decline in local government employment. Other encouraging signs in the report were the 29,000 rise in temporary employment, often a leading indicator of total employment, and the recent pick-up in average hours worked. While monthly employment gains around the 200,000 mark are obviously an improvement on what we’ve seen up until now in this recovery, job growth still isn’t strong enough to bring the unemployment rate down rapidly.” US economy US economic growth and recession Economics United States FTSE Stock markets Manufacturing data Manufacturing sector Larry Elliott guardian.co.uk

Posted by on April 1, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.