US stocks rise on surprise job figures

US unemployment rate falls to 6.2 per cent

All three leading American indices opened up on Friday, boosted by far better US job figures than had been expected.

American businesses added 379,000 payrolls in February, according to the Bureau of Labor Statistics, almost double the 200,000 figure generally forecast by analysts.

After contracting in December during a second surge of Covid-19 cases, the US labour market has now grown for the second month in a row as the coronavirus crisis recedes.

Cases have continued to fall with the advent of spring. Although a number of states key to the US economy have maintained restrictions the momentum has shifted towards easing. This week, Texas Governor Greg Abbott announced the lifting of a state-wide mask mandate, stating:

“Too many Texans have been side-lined from employment opportunities. Too many small business owners have struggled to pay their bills. This must end. It is now time to open Texas 100 per cent.”

However, the expectation-beating payroll figures threaten to misrepresent the pace and scale of the US job market recovery. The labour-force participation rate remained the same in February at 61.4 per cent.

Furthermore, although the US unemployment rate fell by 0.1 per cent month-on-month, the U-6 unemployment rate, which has a wider scope of what constitutes employed workers, was unchanged at 11.1 per cent.

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Nonetheless, the latest payroll figures can be said to have provided some positive sentiment to a US market that continues to be beset with fears relating to recent bond market volatility.

All three leading US indices closed down on Thursday, after Federal Reserve chairman Jerome Powell stated he was keeping an eye on rising yields but did not provide any guidance on what action he might take if they rose dramatically in the near future.

By mid-morning (EDT) both the S&P500 and Dow Jones Industrial Average traded up by 0.2 and 0.3 per cent, respectively. The Nasdaq stood 0.5 per cent lower, with labour market positivity seemingly insufficient in arresting tech stock concerns.

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