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The US stock market is reacting positively to the job figures for October, which were presented one hour before trading began on Wall Street.
- The broad S&P 500 index is up 0.67 percent
- The Nasdaq Composite Technology Index is up 0.69 percent
- Industrial-heavy Dow Jones rises 0.66 percent
531,000 new jobs were created in the United States in October, the US labor market report showed on Friday.
The report is often referred to as “the most important figure of the month”, because the figures give an indication of how things are in the world’s most important economy. The figures are closely followed by the US Federal Reserve (Fed), and they are also closely followed in financial markets around the world.
The increase in the number of jobs is a significant increase from last month, when 312,000 new jobs were created. Wage growth on an annual basis was 4.9 per cent in October, while the unemployment rate fell to 4.6 per cent.
The report is presented while there are growing concerns about the US labor market, especially the shortage of labor.
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Companies have therefore increased wages and introduced other incentives to get people back to work.
At the same time, the US economy has experienced a stagnation – US GDP rose only two percent in the summer months, which is far below expectations for US recovery after the pandemic.
The US Federal Reserve is closely monitoring the unemployment figures, because when they become solid enough, the bank will probably raise the key interest rate.
– It seems very likely that it is starting to approach this threshold. The reduction in support purchases of securities will start at NOK 15 billion a month in November and December, but will possibly be adjusted upwards next year if the labor market moves in a positive direction.
Knut A. Magnussen writes in DNB Markets in an analysis immediately after the publication of «nonfarm payrolls». (Terms)Copyright Dagens Næringsliv AS and / or our suppliers. We want you to share our cases using a link, which leads directly to our pages. Copying or other use of all or part of the content may only take place with written permission or as permitted by law. For additional terms look here.
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