Stocks rise as US job figures show return to growth
The US non-farm payroll figure for March was ahead of analysts’ forecasts, and much stronger than the 33,000 jobs created in February which was a 17-month low.
The employment figure beat expectations of a rise of between 170,000 and 180,000 jobs, though the rate remained at 3.8%.
The Dow Jones Industrial Average rose 42.93 points, or 0.16%, at the open. The S&P 500 opened higher by 4.77 points, or 0.17%, while the Nasdaq Composite gained 22.73 points, or 0.29%.
JR Zhou, market analyst at the online trading platform, Infinox said: “It’s a thumping return to business as usual for the US economy, and the equity markets are loving it.
“With unemployment holding steady and the rate of job creation catapulting back to almost a fifth of a million new jobs in a month, America’s vast employment engine is purring smoothly.
“But best of all for US stocks, the jobs boom appears unencumbered by wage inflation. And with salary growth remaining so modest, America’s relentless economic progress is generating remarkably few inflationary side effects.
“With the Fed already planning to hold off on the next round of interest rate hikes, the lack of inflationary pressure will seal the deal. America’s central bankers can afford to sit back and watch the economy grow without the need for either stimulus or inflation-checking monetary intervention.
“The receding possibility of an interest rate hike may soften the Dollar’s momentum, but from both a currency and an equity point of view this is close to a ‘straight A’ jobs report.”
David Lamb, head of dealing at Fexco Corporate Payments commented: “February’s blip has been all but forgotten as America’s resurgent economy rockets back to strong job growth.
“It’s a testament to the solidity of its progress that even with February’s anaemic performance, America generated an average of 180,000 new jobs a month during the first quarter of the year.
“The message to those who were worried is clear – ‘nothing to see here, move along’.
“One surprise is that even with America hovering close to the full employment mark and employers fighting hard to hire, wage growth remains modest.
“While the lack of inflationary pressure means the Fed is set to continue its ‘wait and see’ attitude to further interest rate rises, the Dollar didn’t need an interest rate boost to attract buyers.
“The simple combination of robust growth at home and progress in the US-China trade talks has been more than enough to energise Dollar bulls. While the knee-jerk gains seen in the first minutes after the data came out have eased, the Greenback is closing out the week on a high.”