Steady US jobs growth pushes markets higher

(AP) Steady US jobs growth pushes markets higher
Associated Press
Evidence of steady, if unremarkable, jobs growth in the U.S. pushed markets higher on Friday, adding to the cheer from good economic indicators out of Europe.

The world’s largest economy added 157,000 jobs in January, in line with market expectations, though hiring over the past two years was revised up. The improvement was not sufficient to prevent the unemployment rate _ which is based on surveys of households, not employers _ to edge up to 7.9 percent from 7.8 percent in December.

The figure ease niggling concerns that the U.S. economic recovery may have been running out of steam _ figures for gross domestic product this week showed the economy contracted on an annualized basis in the fourth quarter for the first time in three years. But that figure was mainly due to a one-off drop in defense spending and, with Friday’s jobs figures, suggest the U.S. is recovering slowly.

Looking ahead, investors will keep watching economic news out of the U.S., where reports on the manufacturing sector and consumer sentiment are due.

By midafternoon in Europe, Germany’s DAX was up 0.3 percent to 7,795.02 while France’s CAC-40 added 1.1 percent to 3,773.34. Britain’s FTSE 100 rose 0.5 percent to 6,308.29.

Wall Street was expected to rise on the open, with Dow Jones industrial futures up 0.5 percent to 13,860 and the broader S&P 500 futures adding 0.5 percent to 1,500.20. Although the Dow Jones industrial average finished lower on Thursday, the index logged its best January since 1994 by finishing 5.8 percent higher for the month. The Standard & Poor’s 500 finished the month 5 percent higher, its best start to the year since 1997.

Earlier, upbeat news in Europe had helped push markets higher. Official figures showed the unemployment rate in the 17-country eurozone was at a lower-than-expected 11.7 percent in December, unchanged from the previous month’s rate, which was revised down from 11.8 percent, a record high. Inflation was also steady, suggesting the recession ravaging the currency union is it abating.

“With eurozone economic activity seemingly bottoming out last October and business confidence picking up, the pressure on labour markets has eased,” said Howard Archer, chief European economist at HIS Global Insight.

“Nevertheless, business confidence is still relatively low in most countries and eurozone economic activity is unlikely to be strong enough to prevent further rises in unemployment over the coming months.”

Earlier in Asia, stocks were mixed after manufacturing data from China fell short of expectations. Industrial production is still growing, but at a slower pace, according to the government-sanctioned China Federation of Logistics and Purchasing. Its manufacturing index for January fell to 50.4 from 50.6 in December on a 100-point scale in which numbers above 50 indicate expansion.

Hong Kong’s Hang Seng fell marginally to 23,721.84. South Korea’s Kospi dropped 0.2 percent to 1,957.79. Australia’s S&P/ASX 200 gained 0.9 percent to 4,921.10. The ASX closed at 4,879 on Thursday, capping its best January since 1995, Lucas said.

Japan’s Nikkei 225, meanwhile, was once again energized by the yen’s continued descent against the dollar. The index rose 0.5 percent to 11,191.34.

Benchmark oil for March delivery was down 28 cents to $97.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 45 cents to close at $97.49 a barrel on the Nymex on Thursday.

In currencies, euro rose to $1.3668 from $1.3574 late Thursday in New York. The dollar rose to 92.05 yen from 91.38 yen.


Pamela Sampson in Bangkok contributed to this report.