‘Poor’ US jobs data fails to disturb stock markets

JOB creation in the United States came in much lower than expected yesterday – but stock markets held firm on hopes it might delay further cuts in the Federal Reserve’s bond-buying programme.

The US labour department said employers added 113,000 jobs in January, well below market expectations of 185,000 and a lacklustre figure of 75,000 in December.

More positively, the American jobless rate hit a new five-year low of 6.6 per cent in January. Job gains over the past three months have averaged 154,000, down from 201,000 in the preceding three months.

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US stock futures initially dropped sharply on investor concerns about a slowdown in the US recovery, but Wall Street opened higher. The Footsie blue-chip index in London later closed up 13.4 points at 6,571.7.

“This definitely still keeps the questions in play about the strength of the [US] economy,” Anthony Valeri, an investment strategist at LPL Financial in San Diego, said.

Economists had hoped for a much bigger rise in non-farm payrolls, and also a sharp upward revision to December’s pale job creation figures Stateside that failed to materialise.

Analysts said the second consecutive month of weak hiring – marked by declines in retail, utilities, government, and education and health employment – could be a problem for the Fed in its scaling back of its monthly bond-purchasing stimulus.

The US central bank’s next policy-setting meeting is on 18-19 March. Yesterday’s data showed strong employment gains in the weather-sensitive construction sector in January, contrasting with a heavy negative weather effect on hiring in December.