Stock markets around the world hit three-month highs as the US job market revived.
As President Trump celebrated a surprise drop in unemployment in the face of the coronavirus pandemic, the FTSE 100 index rose 2.25%, or 142.86 points, to a 13-week high at 6,484.30.
It has taken gains since the March low of 30%.
As President Trump celebrated a surprise drop in unemployment in the face of the coronavirus pandemic, the FTSE 100 index rose 2.25% to a 13-week high at 6,484.30.
However, the benchmark is still down 15% so far this year, which means that investors are still far from recovering their Covid-19 losses.
The rally in London echoed around the world with the Dow Jones Industrial Average up almost 4% in New York.
Stock market gains came as official figures in the United States showed that unemployment in the world’s largest economy had dropped from a high of 14.7% after the Second World War to 13.3% last month.
The number of Americans at work increased by 2.5 million in May, after plummeting close to 21 million in April when the foreclosure of the US economy hammered business.
The figures defied gloomy predictions that unemployment would reach almost 20% and the number of working Americans would drop by 8 million.
Market performance: the London rally echoed worldwide, with the Dow Jones Industrial Average increasing by almost 4% in New York.
A jubilant Trump – who is struggling to cope with the aftermath of the death of African-American George Floyd at the hands of the police on May 25 – predicted that the struggling US economy would have recovered by 2021.
“We are bringing our jobs back,” he said at a White House press conference.
“I think we’re actually going to go back higher next year. “
In a statement accompanying the numbers, the US Department of Labor said, “These improvements in the labor market reflect a limited recovery in economic activity that had been reduced in March and April due to the coronavirus pandemic and efforts to contain it. “
With the global economy facing a devastating recession, employment figures in the United States have raised hopes that the recovery may be stronger than expected.
Randy Frederick, vice president of trading and derivatives for Austin, Texas-based financial services company Charles Schwab, praised the figures.
He said: “It is refreshing to have a very positive and much better than expected report.
“The unemployment rate is expected to peak in May and then improve from there, but it looks like it may have peaked in April, which is a very positive development for the economy. “
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