The FTSE 100 carved out minor gains on Friday as the market digested the latest instalment of US jobs data.
The FTSE 100 was up 0.45% in mid afternoon trading on Friday following the release of the Non-Farm Payrolls which heavily missed expectations. However, the FTSE fell into the close but hang on to weekly gains.
Economist estimates of 550,000 jobs added in November proved to be significantly more than the actual reading of 210,000.
November payrolls 210K, Exp. 550K
— zerohedge (@zerohedge) December 3, 2021
There go the Fed’s accelerated tapering plans
The initial market reaction saw UK equities fall, only to be quickly bought into by traders looking forward to what the data means for the Federal Reserve and their pace of tapering.
US equities were choppy as the weak jobs reading cast doubts on the Fed’s recent hints at a faster pace of bond purchase tapering.
The headline figures was a major disappointment in what was otherwise a strong report that saw the unemployment rate fall and prior reports revised higher. US unemployment fell to 4.2% vs expectations of 4.6%.
The market will now await the Fed’s meeting 14th & 15th December and their decision on tapering.
We’ve added 1.1M jobs in the last 3 months and are now 3.9M jobs short of Feb 2020 level. Omicron is the big question mark going forward. pic.twitter.com/nMVe9cHeVW
— Steven Rattner (@SteveRattner) December 3, 2021
However, with the discovery of the Omicron variant, the decision to taper is not a one dimensional assessment of the jobs market, but a careful consideration of economic health with soaring inflation and the unknown impact of Omicron.
Despite the uncertainty, markets remained little changed on Friday with the FTSE 100 holding onto the rebound from last week’s selling.