US payroll data fell short of forecast this week boosting stocks as the likelihood of interest rates rising receded. Energy stocks rose on both sides of the Atlantic lifting indices close to their highs.
The attest US jobs report fuelled speculation that the Federal Reserve would not raise interest rates this month. The dollar eventually recovered from its initial slide and gold pared its gains as the data did not reduce expectations that the central bank would raise interest rates before the end of the year.
Non-Farm payrolls rose by 151,000 short of the consensus forecast of 180,000 and below July’s revised figure of 271,000. Nevertheless, the unemployment figure remained at 4.9%. Wage growth however remains elusive with average hourly earnings falling to a six-month low of 2.4%. Analysts believe that the economic outlook could be stronger than current expectations which could eventually lead to an aggressive tightening cycle.
Gold took its lead from the moves for the dollar and bond yields. Gold initially rose $16 before easing back to stand $6 higher at $1,319 an ounce. US and European equity market rose throughout the day, the S&P 500 was up 0.4% and 0.5% higher over the week, just 11ponits short of the record closing high it reached last month. European stocks were even stronger with the Stoxx 600 rising by 2% over the week and the FTSE 100 rose by 2.2% on Friday alone.
Energy stocks were significant gainers as oil prices recovered some of the declines from earlier in the week. Brent was up 3% at $46.81 a barrel, but still down more than 6% over the week.