US jobs: Trump’s economy beats expectations to add 128,000 workers
Sterling’s rise was cut short today by US jobs data that beat expectations, pushing the dollar higher as America added 128,000 jobs to its economy in October.
The pound, which came close to hitting $1.30 earlier on a weak dollar, curbed its climb to stand 0.22 per cent up at $1.296 while the dollar rose to ¥108.
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Economists had expected companies to add just 85,000 jobs last month. Manufacturing employment sank by 42,000 as a result of a General Motors strike, according to the US Bureau of Labor Statistics.
The strike ended only last week after management agreed a new pay deal with workers.
The better-than-expected figures lent credence to the Federal Reserve’s position that the US economy is in good shape, economists said today, as it cut rates for a third time this year.
“The Fed is looking smart today,” Edward Moya, senior market analyst at foreign exchange trader Oanda, said.
“The mid-cycle adjustment call seems to tentatively be justified with a robust labour market that continues to keep this record expansion going strong.
“US stocks are set to open higher and will likely close at a fresh record high if we don’t see an abysmal ISM manufacturing reading.”
The S&P 500, which hit a record high earlier this week, could rise even further on the back of the latest figures.
But Richard Flynn, UK managing director at investor Charles Schwab, warned of a slowdown in US employment amid wider economic challenges.
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“The job market has cooled significantly since last month, as slowing global growth and trade war concerns continue to fester,” he said.
“Despite the Fed’s decision to cut rates a third time this year earlier in the week, US economic activity has failed to pick up meaningfully, which has aided the argument that rate cuts are unlikely to be the elixir for what ails the broader economy.”