FTSE boosted by unexpected US job increase
The FTSE was boosted to within a few points of its highest close this year by positive employment data from the US today.
The index closed at 4376 – up by more than 50 points – after the news that job creation figures were double what analysts had been expecting.
126,000 new jobs were created in the US in October, bringing the unemployment rate down marginally to 6%.
Combined with the interest rate increase from the Bank of England yesterday, the data suggests that the global economic recovery is beginning to gather pace.
The job increases follow good gains in the third quarter for the US economy with annualised growth up by 7.2%. Analysts claimed that the improvement in job creation was the missing piece of the jigsaw for the US recovery.
But according to American business magazine ‘Forbes’, Federal Reserve governor Ben Bernanke pointed out yesterday that the US economy needs 150,000 new jobs every month just to keep employment rates static, because of population growth.
The Fed has kept rates at an historic low of just 1% during the economic downturn, and analysts have suggested that the real sign of a prolonged recovery will be when Alan Greenspan and his colleagues introduce a rate hike.
