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Here's the number you've been waiting for: U.S. payrolls rose just 74,000 in
December, miles below expectations of 200,000. There was an upside though, in
that the unemployment rate fell to 6.7 per cent from 7 per cent.
So far, the impact on markets is modest: Futures for the Dow Jones industrial average were up about 60 points before the report was released at 8:30, and the gains were reduced to 24 points after the release. They did briefly dip into the red before recovering. The yield on the 10-year Treasury bond fell 7 basis points, and European stocks held onto impressive gains.
Just as dismal employment growth implies that the economic recovery might not be as strong as originally envisaged, it also suggests that the Federal Reserve won't be in such a rush to wind down its bond-buying stimulus. As well, there could be some mitigating factors at work here: December was a bad month for weather. According to the report, 273,000 Americans missed work because of wintry conditions.