Helal Miah, investment research analyst at The Share Centre, explains what the latest set of US unemployment figures mean for investors.
The US unemployment numbers reported by the Bureau of Labor Statistics last week were a positive surprise, as 280,000 new jobs were created instead of the 228,000 expected. Jobs were generated across a broad range of sectors and the average hourly wage increased by 2.3%.
This should help reassure some investors that the US economy is still on the growth path after the poor first quarter it experienced.
The US has been creating jobs at a fairly steady rate over the last year with it being reported that those who gave up looking for work are now back on the hunt for employment. Subsequently, the unemployment rate ticked up to 5.5% from 5.4%.
These numbers paint a good picture of the US economy and therefore should be encouraging news for UK equity investors given our strong trade relations. However, this announcement does now have the potential to bring forward the timing of the first interest rate rise and as a result the US Dollar has appreciated mildly against most other currencies.