Fears of US recession ease as job creation ticks up | Business News


A stronger performance for job creation in the United States appears to have eased financial market fears of a US recession.

Closely-watched employment data showed that 142,000 net new jobs were created in the world’s largest economy last month.

While that was below forecasts of 160,000, it represented a significant recovery on a downwardly revised total for July of just 89,000.

Money latest: Liam Gallagher jokes about Oasis ticket prices

A total of around 200,000 is typically considered healthy.

Other figures revealed a slight tick-up in wage growth, though the unemployment rate fell to 4.2% following four consecutive increases previously.

Anticipation of a stronger performance than witnessed in July, which sparked heavy stock market losses, was seen in values ahead of the data’s publication.

The dollar lost ground against most international currencies and was almost half a cent down versus the pound at $1.32.

That was explained by analysts as the data coming in below a level that could frighten the Federal Reserve away from its first interest rate cut, widely expected later this month.

Please use Chrome browser for a more accessible video player

Trump criticises Harris on economy

US stock markets pared expected losses at the open while the FTSE 100 was trading flat shortly after the report was released, having been 0.5% lower earlier in the session as some limited risk appetite returned.

That was also seen in the cost of oil, with Brent crude trading higher at $73.

Mining and energy stocks have suffered over the past week as prices have fallen amid a lack of evidence that the US economy could avoid a recession despite technically remaining in growth, albeit weak.

While most countries define such a downturn as following two consecutive quarters of negative growth, the US takes account of employment too.

As such, a recession can only be officially declared by a special committee of economists.

The weak hiring data of recent months had put pressure on the presidential election campaign of the Democrat candidate Kamala Harris.

Read more from Sky News:
Economy ‘needs £1trn investment over decade to achieve 3% annual growth
Tycoon Caring close to £1bn sale of Ivy Collection
New Body Shop owner lines up financing as rescue deal looms

The update from the Labor Department was received as “mixed” by many analysts, though most saw enough evidence to suggest the downturn in job creation may have bottomed out, making the central bank’s interest rate decision easier.

Michael Brown, senior research strategist at Pepperstone, said of the report: “All of this does little to clear up the debate over the September Fed meeting.

“Doves will point to a cooling pace of headline payrolls growth as potential reasoning for a larger 50bp [basis point] cut.

“Hawks, meanwhile, will reasonably point towards the lack of further cooling compared to the July report, and hot-ish earnings growth, as reasons to kick-off the normalisation cycle with a more modest 25bp move.

“My base case remains for the latter, particularly given the risk the Fed run of sparking a market panic were a larger cut to be delivered.”



View Original Source Here

You May Also Like

Mississippi abortion case will have enormous ripple effect for women across the US

Outside Mississippi’s only abortion clinic, it is rowdy, tense, and uncomfortable.  …
Ukraine war: Hundreds of new sanctions placed on Russia by US and EU after Alexei Navalny’s death | World News

Ukraine war: Hundreds of new sanctions placed on Russia by US and EU after Alexei Navalny’s death | World News

Hundreds of new sanctions have been placed on Russia by the US…

‘Environmental catastrophe’ after massive oil spill in waters off California

An emergency clean-up effort is under way in Huntington Beach, California, after…

Supreme Court rejects Trump bid to overturn election results

The US Supreme Court appears to have put the final nail in…