US in ‘Goldilocks zone’ with wages slowing while job growth rises

MARKETS ended another roller coaster week on a firmer footing as news of cooling wage growth in the US suggested that last month’s turmoil may have been a storm in a teacup.

US pay surging ahead of economists’ expectations sparked last month’s global stocks sell-off after igniting fears that the Federal Reserve would have to accelerate the pace of its interest rate rises to combat an uptick in inflation.

But the Bureau of Labor Statistics said yesterday that wage growth in the States eased back to 2.6pc in February and also revised down the previous month’s shock reading by a 0.1 percentage point to 2.8pc.

The slowdown in pay packets indicates that there is still room for job creation in the US’S tightening labour market.

Job creation in February smashed economists’ expectations with some 313,000 jobs added to the US economy.

Analysts said that the labour figures fell into a “Goldilocks zone” for markets with wage growth pulling back and job creation rising to its strongest in over three years. The slowdown in pay relieves the pressure on the Fed to hike rates by up to four times in 2018.

The Dow Jones and S&P 500 climbed over 1pc on opening while European stocks brushed aside Donald Trump following through on his trade tariff threats to nudge higher.

The FTSE 100 was treading water until the sentiment-boosting labour statistics from the US. It closed 21.27 points higher at 7,224.51.

London’s mining heavyweights led the charge on the UK’S blue-chip index after City analysts at Investec put BHP Billiton and Anglo American on its “buy” list. Despite the threat of base metals being caught up in the centre of a global trade skirmish, Investec’s Hunter Hillcoat told clients that the global miners have significantly lower debt levels and added that rising costs are eclipsed by the recent jump in commodity prices.

Aussie miner BHP Billiton climbed 32p to £14.36 while Anglo advanced back up towards five-year highs, gaining 45p to £17.52.

Esure rose 3.6p to 227.6p after the Shelias’ Wheels insurer was awarded a double upgrade to “outperform” by RBC Capital Markets.

Analyst Kamran Hossain argued that the company will be able to expand its footprint in motor insurance and is “well sheltered” from any steep price declines in the sector. Industrial chains supplier

Renold finished rock bottom of London’s leaderboard after warning on profit and admitting that it would have to pass on higher raw material costs onto customers. Its shares plunged 10.6p to 34p, a 24pc slump. Off-licence operator

Conviviality’s freefall in the wake of its shock profit warning extended into a second day despite its chief financial officer trying to steady the ship by snapping up £131,000 of shares.

Yesterday’s 15p drop to 108p took the company’s shares to an all-time low after a two-day 63pc nosedive.