US companies cut fewer jobs than forecasted

US companies cut fewer jobs than forecasted

03-09-2010 09:50

The US jobless rate stabilized in February due to American companies cutting less jobs than forecasted, official figures demonstrated this Friday. These positive data strengthened hopes that the US economy has overcome the most intense period of the economic crisis. The stronger-than-expected report also had a positive impact on the Dollar rate and global stock markets.

Unemployment rate

US employers eliminated 36.000 jobs last month, which resulted in a steady unemployment rate of 9.7%, according to figures provided by the US labor department. These figures exceeded economists’ expectations. The medium estimation for the closely watched report, regarding the total number of paid US workers in goods-producing, construction and manufacturing companies, forecasted that the number of jobs would decrease by 50.000 and that the unemployment rate would rise to 9.8%.

Harsh weather

Several analysts had expressed concerns about even more gloomy figures, due to the poor weather in February. However, the impact of the harsh weather was unclear, according to the labor department. “It could be possible that the winter storms in some parts of the US have influenced payroll employment and hours,” the labor department commented. “Nevertheless, it’s impossible to measure exactly the net influence of the severe winter weather on these figures.”

Payroll data

Despite the fact that the jobless rate just under 10% continues to worry Obama’s government, additional elements in the figures boosted market sentiment regarding the recovery of the US economy. December’s payroll data were adjusted up, which resulted in 109.000 job cuts instead of 150.000, as firstly announced. Furthermore, the payroll numbers for January were adjusted downwards and resulted in 26.000 job cuts in comparison to the 20.000 job cuts reported previously.

Dollar

The Greenback gained versus other key currencies, such as the Sterling, after today’s report, and American stock futures rose strongly before the start of today’s trading session on the New York Stock Exchange. Stock markets in other parts of the world also benefited from today’s figures that exceeded expectations, and the FTSE 100 Index increased its gains by approximately 20 points, reaching 5571 shortly after the figures.