Stronger jobs figures than had been widely expected and renewed talk from the White House about a tax break for overseas corporate profits pushed the Dow Jones industrial average to a new high yesterday.
US unemployment fell to a 16-year low in July as hiring surged ahead of expectations, the Department of Labor’s employment report showed, prompting a shortening of odds on a Federal Reserve rate rise later in the year.
The Dow broke through the 22,000-points mark for the first time on Wednesday, powered by strong earnings reports from America’s big companies and a falling dollar. On Thursday the index closed at a record high for the seventh successive session. At lunchtime in New York yesterday it was on track for yet another all-time high, up by 37 points at 22,063.13.
The employment report showed that 209,000 jobs were added to non-farm payrolls last month, down from a revised 231,000 in June but ahead of expectations of 178,000. Unemployment fell to 4.3 per cent from 4.4 per cent as average hourly earnings rose by 0.3 per cent, after a 0.2 per cent gain in June.
President Trump tweeted: “Excellent jobs numbers just released – and I have only just begun. Many job-stifling regulations continue to fall. Movement back to USA!”
However, Marcus Bullus, trading director at MB Capital, suggested that Washington was proving to be a drag on the economy. “Market-watchers have so far been able to ignore the president’s increasingly stalled policy agenda and the tightening net of Robert Mueller’s Russia probe, but markets can only look past political developments for so long,” he said.
The probability of a December rate increase was roughly evens after the report was published yesterday. It was about 45 per cent on Thursday, according to the Fedwatch tool from CME Group, which tracks futures prices.