Markets soar as US job figures quell rate fears
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 index leapt 170 points within an hour of the market's opening, taking the index above 11,000. It closed up 235.24 points at 11,078.45. 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 Florida man sentenced to two-and-a-half years for having sex on the beach in front of a child
- 2 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 3 Nick Kyrgios calls former Olympian Dawn Fraser a 'blatant racist' after she tells Wimbledon star to 'go back where their parents came from'
- 4 World learns of app that shows you who unfriended you on Facebook, app promptly crashes
- 5 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
Greece debt crisis: Angela Merkel and Francois Hollande issue Athens with 24-hour ultimatum to avoid crashing out of the euro
Greece crisis: Referendum exposes a gaping hole at the heart of the European Union – its lack of genuine legitimacy
iJobs Money & Business
£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...
competitive: SThree: Are you passionate about sales?Do you have a keen interes...
£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...