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Markets largely brush off weak US jobs report

Published on NewsOK Modified: January 10, 2014 at 10:46 am •  Published: January 10, 2014

LONDON (AP) — Weak U.S. jobs figures weighed only slightly on global stocks Friday, with the disappointment largely assuaged by hopes the Federal Reserve won't reduce its monetary stimulus again in the near future. The dollar, however, suffered a big reverse.

The 74,000 increase in payrolls in December was the smallest since January 2011. The unemployment rate still fell, by 0.3 percentage points to 6.7 percent, but that was largely because people dropped out of the labor force.

Though the figures were disappointing for stock investors who had been counting on further U.S. economic strength, they likely mean the Fed will not reduce its stimulus any more than traders currently expect. The stimulus has been one of the major props to stocks over the past few years.

Neil MacKinnon, global macro strategist at VTB Capital, said the figures provide "some leeway for incoming Fed boss Janet Yellen to maintain existing policy settings, especially in providing dovish forward guidance on interest rates."

At its December policy meeting, the Fed decided to reduce its financial asset purchases by $10 billion to $75 billion from this month partly because of improvements in the labor market. Unlike many other central banks around the world, employment levels are a key component of the Fed's mandate.

Following the figures, stock markets in Europe closed slightly down on where they were before while the main Wall Street indexes fell modestly.

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