Markets higher as investors
await US jobs report

Some rare good economic news from Europe pushed stock markets higher on Friday as investors awaited a key U.S. employment report that is expected to show steady, if unremarkable, job growth.

The unemployment rate in the 17-country eurozone was at a lower-than-expected 11.7 percent in December, unchanged from the previous month's rate, which was revised down from 11.8 percent, a record high. Inflation was also steady, suggesting the recession ravaging the currency union is it abating.

"With eurozone economic activity seemingly bottoming out last October and business confidence picking up, the pressure on labour markets has eased," said Howard Archer, chief European economist at HIS Global Insight.

"Nevertheless, business confidence is still relatively low in most countries and eurozone economic activity is unlikely to be strong enough to prevent further rises in unemployment over the coming months."

Germany's DAX advanced 0.6 percent to 7,823.62 in early trading while France's CAC-40 added 0.9 percent to 3,765.58. Britain's FTSE 100 rose 0.6 percent to 6,314.44.

Wall Street was expected to rise on the open, with Dow Jones industrial futures up 0.5 percent to 13,860 and the broader S&P 500 futures adding 0.4 percent to 1,498.70. Although the Dow Jones industrial average finished lower on Thursday, the index logged its best January since 1994 by finishing 5.8 percent higher for the month. The Standard & Poor's 500 finished the month 5 percent higher, its best start to the year since 1997.

Looking ahead, investors will focus on the U.S. jobs report, which often sets the tone in stock markets for days. Economists forecast the world's largest economy added 155,000 jobs in January and that the unemployment rate stayed at 7.8 percent for a third straight month. That would help the economy grow after it shrank at an annual rate of 0.1 percent in the final quarter of 2012.

The figure will be particularly important in forming expectations of the recovery after GDP figures earlier this week showed a surprise 0.1 percent annualized contraction in the U.S. economy. A week jobs report on Friday would provide a big blow to investor sentiment.

Post Your Say

Selected comments will be published in the Readers’ Forum page of our print newspaper.