Saturday, 6 September 2014

US jobs gain hits a low, S&P 500 hits a high

The recent run of strong US economic data ended on Friday with the jobs report, which showed that US employment rose by 142,000 in August, the smallest gain this year.

The unemployment rate fell to 6.1 percent from 6.2 percent in July partly because people dropped out of the labour force.

Economists were mostly unperturbed by the weak data though.

“The shortfall in payrolls is disappointing, but it sure looks like a fluke, not a trend,” said Diane Swonk, chief economist at Mesirow Financial.

Indeed, US stocks rose on Friday. The S&P 500 gained 0.5 percent to hit a new record high.

In contrast, the STOXX Europe 600 fell 0.4 percent despite a report on Friday showing that German industrial production rose 1.9 percent in July, the biggest increase since March 2012.

Another report from Europe on Friday confirmed that the eurozone economy stagnated in the second quarter as investment fell for the first time in more than a year.

A report from Japan, though, provided some hope that its economic recovery will resume.

The Cabinet Office reported on Friday that its leading index rose to 106.5 in July from 105.9 in June. The coincident index edged up to 109.9 from 109.7.

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