More Americans found private-sector jobs in February than had been expected, pushing global stocks to their highest level in more than 4½ years a day after a Wall Street stock index rose to a record.
Businesses created 198,000 new jobs last month, more than the 170,000 expected by economists surveyed by news wires, according to a US national employment report by the payroll processor ADP, whose survey covers more than a fifth of all private sector workers in the country.
There was additional positive news as the figure for new jobs created in January was revised upwards showing 23,000 more jobs were added that month, though the US employment rate remains at 7.9 per cent.
A stock market measure of global share prices, the MSCI All-Country World Index, rose for a third day in morning trading in New York to the highest level since June 2008.
“It feels like underlying job growth continues to improve, and at the current pace, this should be enough to start bringing down unemployment,” said Mark Zandi, chief economist at Moody’s Analytics, which is part of the ratings agency of the same name and a co-author of the employment report.
‘Right direction’
“In a really rip-roaring economy, we’d be creating closer to 300,000 jobs a month or a bit north of that. So we’re not there yet, but we’re moving in the right direction,” he said.
The latest data shows that the tax increases and government spending cuts agreed last year have not affected the jobs market, though the Obama administration has warned that 750,000 jobs are at risk from the $85 billion (€65 billion) across-the-board spending cuts, known as “the sequester” coming into effect this year from March 1st.
A closely-watched US labour department report to be released tomorrow, which covers new employment in both the public and private sectors, is expected to show 155,000 jobs were created by government and businesses last month compared with 157,000 finding jobs in January.
Stocks fluctuate
US stocks fluctuated yesterday a day after the Dow Jones industrial average, which covers big-name American stocks such as Coca-Cola and Microsoft, wiped out losses from the four-year financial crisis to hit a new high.
The Dow closed at 14,253 points on Tuesday, more than doubling since falling to a low of March 2009 as the chaos of the deepening financial crisis terrified investors, forcing them to dump stocks.
The price of oil fell below $90 a barrel yesterday for the second time this year as US inventories grew more than forecast.
The death of Hugo Chávez, president of Venezuela, the world’s fourth-biggest foreign oil supplier to the US, didn’t appear to have much of an impact on oil price as market investors awaited political developments in the country. – Additional reporting: Reuters, Bloomberg
