USA jobs news gives Fed chair Yellen tough start
The US labour department said non-farm payrolls rose just 74,000 in December, the smallest gain in three years.
Marcus Bullus, trading director at MB Capital, said: “If ever there was a curveball, this was it. These limp numbers are as puzzling as they are surprising – and caught the markets with their guard down.
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Hide Ad“For the US economy to have added fewer than half the number of jobs expected is a serious worry – and the first stumble in what had begun to look like a relentless rate of job creation.
“All bets are now off on the Fed’s tapering plans. Many are now questioning whether it began to turn off the QE [quantitative easing or bond-buying] taps too soon.”
Yesterday’s data cut the American unemployment rate to 6.7 per cent from 7 per cent when the expectations were for a much bigger reduction as part of a strong US economic rebound.
Michael Hewson, chief market analyst at CMC Markets UK, commented: “Europe’s markets have enjoyed a good session today though they have retreated from their best levels of the day after US non-farm payrolls numbers missed expectations by a mile, coming in well below expectations of 195,000 new jobs.” Yellen succeeds Ben Bernanke as the Federal Reserve’s chair on 1 February.