The FTSE 100 hit its highest level since July 2011 yesterday, finishing at 5901.07, after the announcement that some 243,000 non-farm jobs were created across America in January – considerably more than the 150,000 analysts had pencilled in . US and European stock markets were also given a fillip by the impressive job creation figures from the world's dominant economy. The largest employment gains were in business services, hospitality, leisure and manufacturing.
The higher than expected rate of job creation caused the official US unemployment rate to fall to 8.3 per cent, its lowest level in three years. The encouraging picture was reinforced by survey data showing an impressive expansion of economic activity. The US non-manufacturing ISM survey index shot to a 10-month high of 56.8, up from 53.0 last month.
But some analysts sounded a note of caution. "We're reluctant to get too carried away just yet," said Paul Dales, senior economist at Capital Economics. "It is worth remembering that the economy began both 2010 and 2011 strongly before fading later in each year.
"As the unwinding of the previous fiscal stimulus starts to bite and as global demand falters, something similar may be on the cards this year."Reuse content