Stocks fall amid strong US wage growth
A cooling US labour market could mean that policymakers’ efforts to slow inflation through interest rate rises have begun to take hold on employers.
The US economy experienced its slowest job growth in two and a half years during June. However, strong wage growth of 4.4% year-on-year suggests a tight labour market, reaffirming that the Federal Reserve will resume interest rate hikes later this month.
The Labor Department’s employment report also revealed a reduction of 110,000 jobs created in April and May. This decline indicates that businesses may be reconsidering expanding their workforce due to higher borrowing costs.
The downbeat investor sentiment lingered for the FTSE 100 which ended the session 23.56 points lower at 7,256.94, its lowest level since early November.
Germany’s Dax grew by 0.48% and France’s Cac 40 closed 0.42% higher after partially recovering Thursday’s losses.
It was a mixed start to trading on Wall Street where the S&P 500 was up 0.1% and Dow Jones down 0.1% by the time European markets closed.
The pound was rallying against the US dollar, and was up 0.8% to 1.2835.