Reply #26: US employment data softer than expected

[WhiteTara]

http://www.ft.com/cms/s/913e47f8-23b3-11db-ae89-0000779e2340.html
US employment was softer than expected in July, providing a knee-jerk relief rally for the markets on hopes the data would encourage the Federal Reserve to hold interest rates steady next week.

The Labour Department said 113,000 jobs were created last month, less than the 145,000 expected by economists. The data followed a weak second-quarter growth report released last week and added to the impression that US economy is slowing.

The Federal Reserve has raised rates steadily by a quarter-point at each meeting for the past two years and its Fed funds target currently stands at 5.25 per cent. A further move next week would be the 18th in a row.
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There was some concern about wage inflation as average hourly earnings rose 0.4 per cent, more than the 0.3 per cent expected, for an annual rate of 3.8 per cent.

However, market attention was on the headline job creation rate and bonds and stocks rallied while the dollar slid sharply.

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