European markets extended gains on Friday, rebounding from five consecutive negative sessions, as investors turned their attention to U.S. jobs data today.
The data showed that the US economy continued to add new jobs in August, although the pace slowed compared to the previous month, while wages continued to be on an upward trajectory.
In particular, jobs in the economy increased by 315,000 last month, after the rise of 526,000 jobs in July, as the US Department of Labor announced today. July’s reading was revised slightly lower than the original figure of 528,000.
The unemployment rate, meanwhile, rose to 3.7% from 3.5% as the labor force participation rate strengthened. The participation rate climbed to 62.4% from 62.1%.
The average estimate of analysts in a Bloomberg poll was for 300,000 jobs, with unemployment remaining at 3.5%.
Hourly wages rose 0.3% in August to $32.36, with overall growth over the past year reaching 5.2%, among the biggest increases since the early 1980s.
These data are at the heart of the Federal Reserve’s analysis of the path of the economy and are expected to largely determine its decision on the size of the next interest rate increase.
On the board, the pan-European Stoxx 600 gained 1.4% to 413.55 points.
Germany’s DAX jumped 2.5% to 12,946.67 points, France’s CAC 40 gained 1.6% to 6,131.37 points, while Britain’s FTSE 100 gained 1.5% to 7,253.60 points.
Regionally, Italy’s FTSE MIB gained 2.1%, while Spain’s IBEX 35 gained 0.95%.
Later in the day, data released today showed that producer prices posted another jump in July, confirming concerns that inflationary pressures are not expected to ease soon.
In particular, producer prices increased in July by 4.0% in the Eurozone and by 3.7% in the EU. compared to June, as announced by Eurostat. This follows June’s rise of 1.3% and 1.5% respectively.
From July 2021, producer prices jumped 37.9% in the Eurozone and 37.8% in the EU.
The data comes just ahead of the European Central Bank’s meeting next Thursday with several analysts not ruling out a mammoth 75 basis point hike in interest rates after a barrage of aggressive statements from central bank officials about the need to do more to to control inflation.
Source: Capital
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