US job figures smash expectations

All-important US non-farm payroll data was better than expected on Friday and gave the FTSE 100 (UKX) a welcome boost.

In the seventh consecutive month of gains, official figures show that the US economy created 243,000 jobs in December - significantly higher than the 150,000 predicted by analysts.

The unemployment rate dropped to 8.3%, which was the lowest rate in nearly three years, and down from a revised rate of 8.5% in December.

Employers added an average of 201,000 jobs per month in the past three months, with professional and business services; leisure and hospitality; and manufacturing clocking up large gains.

"January's US jobs figures were a humdinger. They smashed expectations and will be a fillip to markets globally," commented Marcus Bullus, trading director at MB Capital.

"The US economy is growing and it's continuing to add jobs at an impressive rate. That's two claims the eurozone would love to be able to make," he added, noting that the divergence between the US and European economies is becoming more pronounced by the day.

"Some across the Pond will take quiet satisfaction from the differing fates of the US and Europe, but the US needs a strong Europe to perform at its full potential."

However, Bullus warned that quantitative easing may have been prematurely sidelined: "It's important that policymakers don't get too confident too early despite these hugely encouraging figures."