United Kingdom

Stock markets around the world soar after US unemployment falls

Stock markets around the world soared to three month highs as the US jobs market sprang back into life.

As President Trump celebrated a surprise fall in unemployment in the face of the coronavirus pandemic, the FTSE 100 index rose 2.25 per cent, or 142.86 points, to a 13-week high of 6484.30. 

That took gains since the March lows to 30 per cent.

As President Trump celebrated a surprise fall in unemployment in the face of the coronavirus pandemic, the FTSE 100 index rose 2.25 per cent to a 13-week high of 6484.30

However, the blue-chip index is still down 15 per cent so far this year, meaning investors are still some way from recouping their Covid-19 losses.

The rally in London was echoed around the world with the Dow Jones Industrial Average up nearly 4 per cent in New York. 

The stock market gains came as official figures in the US showed unemployment in the world's largest economy fell from a post-Second World War-high of 14.7 per cent in April to 13.3 per cent last month.

The number of Americans in work rose by 2.5m in May, having fallen by a record of nearly 21m in April when the lockdown of the US economy hammered business.

The figures defied gloomy predictions that unemployment would come close to 20 per cent and the number of Americans in work would fall by 8m.

A jubilant Trump – who is struggling to deal with the fallout from the death of African American George Floyd at the hands of the police on May 25 – predicted that the battered US economy will have recovered by 2021.

'We're bringing our jobs back,' he said at a news conference at the White House.

'I think we're actually going to be back higher next year.'

In a statement alongside the figures, the US Labour Department said: 'These improvements in the labour market reflected a limited resumption of economic activity that had been curtailed in March and April due to the coronavirus pandemic and efforts to contain it.' 

With the global economy facing a devastating recession, the jobs figures in the US raised hopes that the recovery may be stronger than feared.

Randy Frederick, vice president of trading and derivatives for financial services company Charles Schwab based in Austin, Texas, welcomed the figures.

He said: 'It's a refreshing thing to experience a very positive and a far better-than-expected report.

'The unemployment rate was likely to peak in May and then get better from there, but it looks as though it might have peaked in April, which is a very positive development for the economy.'

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