“The markets are pricing in downside risks,” Mr Powell also said, “and they are obviously well ahead of the data, particularly if you look at this morning’s labour market data.”
The December jobs report far exceeded expectations, helping to ease concerns about the strength of the US economy – amid signs of slowing growth in China and Europe, which helped trigger a 660-point drop in the Dow on Thursday.
Total nonfarm payroll employment increased by 312,000 in December, and the unemployment rate rose to 3.9 per cent, the US Bureau of Labor Statistics said. Job gains occurred in health care, food services and drinking places, construction, manufacturing, and retail trade.
The change in total nonfarm payroll employment for November was revised higher by 21,000 to to 176,000, and the change for October was revised up by 37,000 to 274,000. With these revisions, employment gains in October and November combined were 58,000 more than previously reported.
Payroll employment rose by 2.6 million in 2018, compared with a gain of 2.2 million in 2017.
In terms of wages, average hourly earnings rose 11 US cents, or 0.4 per cent, in December after gaining 0.2 per cent in November. That lifted the annual increase in wages to 3.2 per cent, matching October’s rise, which was the largest in 9-1/2 years.
“Business confidence may be starting to show a few cracks thanks to slowing global growth and trade tensions, but the US consumer is on very solid ground, with spending supported by a strong job market and decent wage gains,” TD senior economist Leslie Preston said.
Ms Preston said “we expect the pace of growth in the US economy to slow over the course of 2019, but to remain above the economy’s trend pace. That will help keep inflation near 2 per cent, and is consistent with two more 25 basis point rate hikes – a far more gradual pace than the four hikes over the course of 2018”.
Also bolstering overall investor sentiment was a decision by China’s central bank to cut reserve requirements for all banks by 100 basis points, a move that frees up $163 billion for new lending as it tries to reduce the risk of a sharp economic slowdown.
ASX futures jumped 69 points or 1.2 per cent as of 9am Saturday AEDT, setting the stage for a positive start on Monday. The Australian dollar advanced 1.5 per cent to US71.13¢, peaking at US71.24¢.
In New York trading, BHP was up 6.1 per cent, Rio Tinto was 5.6 per cent higher.
Benchmark copper on the London Metal Exchange closed up 3.2 per cent at $US5918 a tonne, its biggest one-day gain since September.
LME aluminium ended up 1.6 per cent at $US1865 a tonne, zinc rose 2.5 per cent to $US2438, lead climbed 0.9 per cent to $US1950 and nickel gained 2.2 per cent to $US11,110.
Chinese steel futures rose on Friday, with iron ore contracts hitting the highest in more than two months, buoyed by expectations that steel mills would replenish their stocks of the raw material. The spot price of iron ore lifted 0.7 per cent to $US73.10 a tonne.
Oil – both benchmark crude and US oil – rallied more than 2.5 per cent. Gold retreated.
with Bloomberg, Reuters