Surge in US jobs gives markets a massive lift

US companies added 297,000 jobs in December - triple the figure predicted by Wall Street economists and a staggering 205,000 increase on November's rise of 92,000.

The payroll data from ADP Employer Services was the biggest monthly gain since the report was first published in 2000.

The research comes just a few days before the US government unveils its own jobs figures on Friday, which cover both private and public sector employment.

Ian Shepherdson, chief US economist at High Frequency Economics, described it as a "bolt from the blue". "Nothing in any other indicators of the state of the labour market last month - jobless claims, help wanted, surveys - suggested anything like this was remotely likely."

A separate report on unemployment added to the good news, with the number of planned lay-offs at US firms falling to its lowest level for ten years last month.

Although economists noted that seasonal factors may have swollen the December figures - such as retailers taking on extra workers over the festive period - they were interpreted as a sign that the US economy is slowly turning in the right direction.

The majority of the 297,000 jobs were added in service-providing industries, which accounted for 270,000 new roles. Goods-providing industries and manufacturers created 27,000 and 23,000 jobs respectively.

The jobs data boosted trading on Wall Street, making up for losses earlier in the day. US markets were also lifted by figures showing that the US services sector expanded at its fastest rate since mid-2006 last month. The encouraging news from across the Atlantic also helped the FTSE 100 end the day in positive territory after a depressing string of updates from high street retailers - in particular HMV.

The FTSE ended up 30 points at 6043.9 following the previous day's bull run in which 113.93 points were added.