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Gold dips, FTSE 100 volatile after US jobs data

by Chris Marshall on Mar 07, 2014 at 15:32

Gold dips, FTSE 100 volatile after US jobs data

European stock markets rallied after a forecast-busting update on the US labour market, only to sink back down again in an unstable end to a volatile week.

With one eye on developments in Ukraine investors sent the FTSE 100 down 0.5% to 6,754, roughly in line with losses across Europe. The UK's blue chip index is heading for its second consecutive weekly loss.

The US S&P 500 rose though, up 0.2%, after the closely-watched US labour market update showed 175,000 new jobs were added to the economy in February, against market expectations of a 149,000 rise.

January’s number was raised from 113,000 to 129,000.

Less positive though was a rise in the unemployment rate to 6.7% from 6.6%, while the three-month average in the rate of growth of non-farm payrolls was the weakest since July 2012.

Economists and investors use the figures to predict whether the US Federal Reserve will continue on its path of reducing its bond-buying stimulus scheme.

Chris Williamson, chief economist at data company Markit, said overall the data ‘adds weight to the belief that the Fed will continue to reduce its monthly asset purchases in $10 billion increments’.

James Knightley of ING Bank had a similar takeaway: ‘With more people in work and these workers earning more money it should be good news for consumer spending and confidence and help cement expectations for ongoing Fed asset purchase tapering.’

The stronger than expected data pushed the gold price lower, down 1.2% to $1,334 per ounce.

FTSE slumps towards weekly loss ahead of US jobs report (09:15)

European share markets pointed lower as investors prepared themselves for this afternoon’s crucial update on the US jobs market.

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