ROBUST US jobs data yesterday eased fears about the health of the global economy and prompted a bounceback in commodity prices after a frantic sell-off the day before.
The US economy added 244,000 jobs in April, well ahead of the 185,000 forecast by market analysts, continuing an upward trend in the labour market this year.
The strong jobs report ended a spectacular week for US president Barack Obama that has boosted his poll ratings and greatly improved his chances of re-election in 2012. As well as the killing of Osama bin Laden, Mr Obama may also benefit from lower oil prices if they lead to cheaper petrol at the pumps.
In the currency markets, the dollar rose above $1.44 to the euro, a rally of five cents in two days, as the better US data were matched by further investor concerns about the economic health of Greece.
“Despite headwinds from high energy prices and disruptions from the disaster in Japan, the last three months of private job gains have been the strongest in five years,” said Austan Goolsbee, chairman of the president’s Council of Economic Advisers.
The jobs numbers eased fears that the world’s largest economy might be heading for another slowdown after weak growth in the first quarter and a series of bad data releases led to a sharp fall in commodity markets on Thursday.
The benchmark Brent crude oil prices recovered more than $2 to $112.80 a barrel. But oil prices were still sharply down on the week after a record loss of $12 the previous day, when non-specialised investors rushed for an exit.
The benchmark measure of commodity prices, the Reuters-Jefferies CRB index, recovered around 1 per cent yesterday, after a 4.9 per cent drop on Thursday.
That was the sharpest decline in more than two years and one of the largest daily drops on record.
The unemployment rate edged up to 9 per cent from 8.8 per cent in March but analysts read little into the rise because it is still well down on the 9.8 per cent recorded last November.
There was solid job growth in retail, manufacturing and most service sectors and a respectable rise in hourly earnings. An increase in the number of workers earning wages should add to consumption and fuel further growth in jobs.
But Michelle Meyer, senior US economist at Bank of America Merrill Lynch, warned that yesterday’s report “probably overstates the strength” of the labour market recovery, which she described as “steady but sluggish”.– (Copyright The Financial Times Limited 2011)
