6th November 2015
A huge leap in the number of jobs created in the US in the past month means an interest rate rise could be on the way soon.
The number of jobs created in the US rose to 271,000 over the last month, far above the 182,000 consensus that economists had anticipated. This surge in jobs means the unemployment rate fell from 5.1% in September to 5% last month, in line with expectations.
Helal Miah, investment research analyst at The Share Centre, said investors should now expect a rate rise in the US soon.
‘Investors should appreciate that these figures did not follow the weakness of August and September and were a fairer reflection of the jobs numbers over the past 12 months,’ he said.
‘These numbers are now likely to heavily influence the Federal Reserve at their December meeting when they decide whether to raise interest rates for the first time since the financial crisis. As a result the US dollar has made material gains against other major currencies, up 1% against both the euro and sterling.’
He added that the reaction in the UK stockmarkets had been ‘mixed’.
‘The market welcomes stronger numbers as a sign of the health of the world’s largest economy, at the same time it is having to take account of the fact that interest rates are more likely to rise soon,’ he said.