US jobs data sparks Wall Street sell-off while pound slump continues
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A sell-off on Wall Street has followed fresh US jobs figures, while the pound continued to slump as a downbeat mood prevailed in UK markets on Friday. Global stock markets were in the red on Friday as investors reacted to stronger-than-expected labour market data from the world’s largest economy.
The FTSE 100 fell 71.2 points, or 0.86%, to close at 8,248.49. The number of jobs added by US employers in December soared past the expectations of analysts, according to official figures, which pointed to a strengthening labour market. Richard Flax, chief investment officer at Moneyfarm, said: “The unexpectedly strong data from the US labour market in December, showing payrolls surging by 256,000 against a forecast of 164,000, has deepened a global bond sell-off and raised concerns about persistent inflationary pressures in the US.
“The robust jobs data fuelled a rally in the US dollar, pushing borrowing costs higher and sending the pound to a 13-month low. With the Federal Reserve less likely to ease interest rates significantly in 2025, markets are recalibrating expectations, reflecting fears that a sustained tight monetary policy could become the norm as inflation risks linger.
“With the Federal Reserve less likely to ease interest rates significantly in 2025, markets are recalibrating expectations, reflecting fears that a sustained tight monetary policy could become the norm as inflation risks linger.”. On Wall Street, the S&P 500 had dropped about 1.7%, and the Dow Jones was down 1.6% by the time European markets closed.
