‘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.

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.