US unemployment just fell to its lowest since 2007

Emma Haslett
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Although wage growth dipped, unemployment reached a 10-year low (Source: Getty)

The pound rose to session highs after official figures showed US unemployment had fallen to its lowest since 2007.

The pound rose to $1.2955 as figures from the US Labor Department showed 211,000 new jobs were added to the US economy in April, way above the 190,000 expected.

Unemployment fell to 4.4 per cent, its lowest in a decade, which was not only down from 4.5 per cent in March, but also below the 4.6 per cent analysts had forecast.

However, hourly earnings dipped, slightly, from 2.7 per cent in March to 2.5 per cent in April. Likewise, the participation rate, the percentage of people of working age taking part in the labour market, fell from 63 per cent to 62.9 per cent in April.

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"[The fall in participation] is one cloud here," said Naeem Aslam, chief market analyst at Think Markets UK.

"Trump's administration has made a big fuss about the participation rate and given that this has dropped even further, investors have the right to know what Trump’s administration will do to address this problem."

However, he added that investors should be mollified.

"The data has shown that the there is a momentum in the economy and the recovery in the US economy still has strong legs to stand on.

"Investors are more likely to believe the Fed’s stance that the weakness in the economic data is only transitory. In short, it is safe to say that we are not going to run into a recession that easily because we need a mammoth shock for that to happen."

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