Markets soar as jobs figures in US quell fears of rate rise
Saturday 04 September 1999
Investors are nervously eyeing every piece of economic data to detect what it might mean for the future course of interest rates. Alan Greenspan, the chairman of the Federal Reserve, has led the Fed in two increases this year, but appears agnostic as to whether a further increase is required.
The Dow Jones Industrial Average leapt 170 points within an hour of the market's opening, taking the index above 11,000. Yields on the benchmark Treasury long bond fell back to 6.03 per cent from 6.14 per cent.
In London the FTSE 100 index built on its gains earlier in the day to end up 136.5 points at 6,332.1. The monthly purchasing managers' survey of service industries in the UK showed activity continuing to expand at a healthy pace, but costs - mainly wages - also increased.
The US jobs figures showed the economy growing a shade less rapidly than investors, at least, had believed. The number of workers employed outside the farm sector rose by 124,000 in August, the Labor Department announced. July's increase had been more than 300,000. The unemployment rate fell slightly to 4.2 per cent, down from 4.3 per cent.
Manufacturing jobs declined by 63,000, when economists at investment firms had been expecting an increase. Employment in the sector had risen in July after months of problems caused by the weak prospects for US exports. The services sector - including computing and health care - remained very strong.
The jobs figures also brought encouraging news of trends in US wages. Average hourly earnings increased by just 0.2 per cent in August. That represents a 3.5 per cent increase over a year ago, a lower pace of growth than analysts expected.
However, Mr Greenspan has warned about the risks of a slowdown in the productivity of US workers, which will pose inflationary dangers if it fails to keep pace with earnings.
Productivity slowed sharply earlier this year, according to figures released on Thursday, climbing at an annual rate of just 0.6 per cent in the second quarter. Unit labour costs picked up sharply, rising to 4.5 per cent, the fastest in five years.
- 1 Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
- 2 Katie Hopkins reveals fear she will die during brain surgery to cure epilepsy
- 3 Edward Heath 'child sex abuse' allegation: Investigation to be held into Wiltshire police handling of alleged claim in the 1990s
- 4 Dutch King Willem-Alexander declares the end of the welfare state
- 5 Tom Cruise: Reporters banned from asking actor about Scientology
Katie Hopkins reveals fear she will die during brain surgery to cure epilepsy
Sabrina Corgatelli: US hunting tourist posts picture of herself with dead giraffe after Cecil the lion outrage
'Gene drive': Scientists sound alarm over supercharged GM organisms which could spread in the wild and cause environmental disasters
Edward Heath 'child sex abuse' allegation: Investigation to be held into Wiltshire police handling of alleged claim in the 1990s
Dutch King Willem-Alexander declares the end of the welfare state
Is Britain really full up? Are migrants taking our jobs? Leading academic answers the most common anti-immigration claims
Calais Migrant Crisis: Deputy Mayor of Calais labels Cameron's use of 'swarm' as 'racist' and 'ignorant'
Chris Leslie: Jeremy Corbyn's anti-austerity agenda will harm the poor, says Labour shadow Chancellor
While we fixate on Calais, the Home Office is quietly deporting dozens of migrants on 'ghost flights'
Landlords renting properties to illegal immigrants to face up to five years in prison
Calais crisis: The seven claims made about the migrants - and the reality
iJobs Money & Business
£21000 per annum: Recruitment Genius: This is an exciting opportunity to join ...
Up to 70k DOE: Guru Careers: We are seeking an experienced Financial Director ...
£11000 - £50000 per annum: Recruitment Genius: This financial company offer ma...
competitive + incentives + uncapped comms: SThree: Did you know? 98% of our di...