The Star Early Edition
US economy on solid ground, data show
US PAYROLLS surged in December and the job count for the prior two months was revised sharply higher, showing the economy on solid ground despite a troubling international backdrop.
Nonfarm-payrolls increased by 292 000 last month, the Labour Department said on Friday, as hiring got a boost from unseasonably warm weather.
The unemployment rate held steady at a seven-and-a-half-year low of 5 percent even as more people entered the labour force.
The robust employment data helped soothe fears about the economy’s health, and suggested recent weakness would largely be contained to the manufacturing and export-orientated sectors, which have been hit by a strong dollar and anaemic global demand.
Efforts by businesses to whittle down an inventory glut and spending cuts by energy companies have also inflicted pain.
“It gives us a short-term shot in the arm and pushes back the idea that we are headed for a global recession or that weakness in China will sink our economy,” says David Donabedian, the chief investment officer at Atlantic Trust Private Wealth Management in Baltimore.
Slumping oil prices and slowing growth in China have cast a pall on the outlook for the global economy.
The upbeat employment report briefly helped staunch the bleeding on Wall Street, but was offset by further declines in oil prices. The dollar firmed against a basket of currencies as traders ramped up bets the Federal Reserve would raise interest rates in March. Prices for US government debt rose on safe-haven bids.
Concerns about a slowdown in China have spooked investors worldwide. But signs of stability emerged overnight after China ditched a stock market circuit breaker and guided its currency higher. – Reuters