Wall Street and London fall as US job figures revive inflation fears
Saturday 10 January 1998
Employment in the US jumped by 370,000 in December, far more than any economists had been predicting. The increase followed a November increase revised up to 412,000, and took the number of Americans in employment to an all-time record of 64.1 per cent.
The pace of job creation has gathered steam, with an extra 3.2 million generated last year, up from 2.5 million in 1996. The unemployment rate stood at 4.7 per cent last month. The Labor Department described unemployment, at 6.4 million, as "essentially unchanged" from its quarter-century low.
Wall Street saw yesterday's jobs report as tilting the balance slightly back towards an interest rate rise at some future date. The Treasury bond market retreated from its recent peak, while the Dow Jones index fell as much as 140 points to 7,662.62 late-morning before regaining a bit of lost ground.
In London, the FTSE-100 index closed 98.8 points lower at 5,138.3, driven by the weak start on Wall Street and Asian woes.
The contrast between the US and continental jobs markets was highlighted by German figures showing an unexpected increase of 20,000 in unemployment to 4.55 million in December. A German news agency reported Chancellor Helmut Kohl as saying it would not be possible to meet his earlier pledge to halve unemployment by the year 2000.
And in France, the government announced an extra Fr1bn (pounds 100m) fund to increase benefits for the unemployed, in response to protests. France's jobless rate is at a post-war high of 12.4 per cent.
The startlingly good US jobs figures were accompanied by news of only a small rise in average hourly earnings to $12.48, a cent up on the month. The December earnings figure was subdued, however, by the fact that there were three extra working days in the month, and is likely to bounce higher in January.
Earnings growth has climbed steadily to a rate of around 4 per cent in the latest quarter - still low given the drop in unemployment.
Meanwhile, in Indonesia the stock market looked poised to break its recent record of hitting new lows every day as prices actually rose in early trading, only to end the day with a 1 per cent fall. However, the local currency surged some 25 per cent.
This faint whiff of optimism came with news that Bill Clinton, the US President, had personally intervened in the crisis by way of a 25-minute telephone conversation with President Suharto, during which he secured Indonesian agreement to take the bitter medicine proscribed by the International Monetary Fund as the price for its $43bn bail-out.
Later in the day President Suharto issued a statement saying he would fully implement the IMF's plans.
- 1 Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
- 2 Man who held up 'hire me' sign at Waterloo station returns a year later with 'I'm hiring' sign
- 3 UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
- 4 Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
- 5 The enemy within: People who hear voices in their heads are being encouraged to talk back
Paris attacks: Do not call Charlie Hebdo killers 'terrorists', BBC says
Rowan Atkinson to sell £10 million McLaren 'supercar' he crashed into a tree and a lamppost
UK weather: Snow to fall in the coming week with sub-zero temperatures to last until early February
Saudi preacher who 'raped and tortured' his five -year-old daughter to death is released after paying 'blood money'
Howard 'Mr Nice' Marks reveals he has inoperable cancer: 'I've had an incredible life'
Nigel Farage: NHS might have to be replaced by private health insurance
'We would evict Queen from Buckingham Palace and allocate her council house,' say Greens
French court convicts three over homophobic tweets, in case hailed as a 'significant victory' by LGBT rights campaigners
Greece elections: Syriza and EU on collision course after election win for left-wing party
British Muslim school children suffering a backlash of abuse following Paris attacks
George Galloway condemns 'racist, Islamophobic, hypocritical rag' Charlie Hebdo at freedom of speech rally
iJobs Money & Business
£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...
£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...
£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...
Negotiable: Recruitment Genius: A Tax Assistant is required to join a leading ...