Double-dip recession fears ease in US
Friday 07 October 2011
Double-dip recession fears in the US eased today after a better-than-anticipated jobs report for September.
US firms created 103,000 jobs, against economist expectations of 60,000, but the additional hiring was not enough to lift the overall unemployment rate, which stayed at 9.1% for the third month in a row.
The data gave markets across Europe a modest boost with the FTSE 100 Index up more than 70 points soon after the figures were released, though the UK's top flight eased back subsequently.
Andrew Wilkinson, chief economic strategist at Miller Tabak & Co, said: "In the big picture, today's reading soothes recessionary fears."
Companies with large US businesses led the rally. Building supplies firm Wolseley, which generates 40% of revenues in the country, topped the FTSE 100 risers while there were also good gains for Holiday Inn and Crowne Plaza hotel group InterContinental.
The US labour department also raised its estimates for the number of jobs created in the previous two months. Non-farm payrolls, or new jobs added, rose by 57,000 in August and by 127,000 in July, according to the revised data.
But Rob Carnell, analyst at ING Bank, warned against reading too much into the figures.
He said: "Overall, this month's labour market report was as unexpectedly good as last month's was unexpectedly bad. This is still not a strong labour market."
Economists also pointed out that 45,000 of September's jobs increase came from a return to work from striking workers at telecoms firm Verizon.
Construction, healthcare, and professional and business services sectors saw the largest gains last month, while government employment edged down.
President Barack Obama has made jobs a key part of a plan to get the US economy moving again. He has proposed a 447 billion US dollar (£290 billion) initiative to create 1.9 million new jobs and cut the rate of unemployment by one percentage point.
The US Federal Reserve has also launched Operation Twist, a 400 billion US dollar (£260 billion) bond buying scheme, in a bid to drive down long-term interest rates and cut borrowing costs for firms and individuals, though many economists expect a further round of quantitative easing is also on the way as well.
- 1 I'm A Celebrity 2014: Jungle security stepped up after murder and 'suspicious death' near to camp
- 3 Jeremy Hunt: 'I took my children to A&E because I didn't want to wait for GP appointment'
- 4 Girl, 7, gets Tesco to remove 'stupid' sign suggesting superheroes are 'for boys'
- 5 This letter from a reader explains why women can’t play football
Sarah Vine criticises lesbian mother Jack Monroe: 'If she was unsure about her sexuality, she should have taken greater precautions'
Black Friday 2014: Opening times for Asda, John Lewis, PC World, GAME and Argos
Three-year-old boy accidentally shoots dead his mother in Tulsa, Oklahoma, as she changes her younger daughter's nappy
Michael Brown shooting: Driver smashes into crowd as protests erupt across the US during a second night of unrest
Jeremy Hunt: 'I took my children to A&E because I didn't want to wait for GP appointment'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
Ukip says babies born to immigrants in the UK should be classed as migrants – which would include Nigel Farage’s own children
The young are the new poor: Sharp increase in number of under-25s living in poverty, while over-65s are better off than ever
Tamir Rice: 12-year-old boy playing with fake gun dies after being shot by Ohio police
Exclusive: UK approved £7m Israeli arms sales in six months before Gaza conflict
£35000 per annum: Ashdown Group: Required skills include SQL querying, SSRS, u...
£30000 - £35000 per annum: Ashdown Group: C#.Net Developer - C#, ASP.Net, HTML...
Negotiable: Argyll Scott International: Senior Business Analyst - Insurance ...
£25000 - £29000 per annum: Recruitment Genius: This independent, growing Sales...