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The number of new US jobs created in June came in at 195,000, with analysts expecting an increase of 165,000. In a further boost for the US economy, the job reports for May and April were revised higher by a total of 70,000 new jobs.
Even though the unemployment rate remained unchanged at 7.6% – economists were anticipating a drop to 7.5% – investors still bought stocks. Economists believe that the US must consistently create 200,000 new jobs per month in order for the unemployment rate to fall, so traders took the view that the US Federal Reserve will keep the current stimulus programme in place for at least the next few months.
In London, the mining sector – which has the biggest weighting on the FTSE 100 – is losing out today, down 2.5% due to weaker underlying metal prices. This is putting pressure in the UK blue-chip index, which has turned negative this afternoon and is currently 23 points lower at 6398.
The Dow opened around 80 points higher at 15,068 on the back of the non-farm payrolls report, after it was closed on Thursday for the Independence Day holiday.