Oil prices rise; US jobs data reduce hopes for rate hikes
US unemployment unexpectedly fell to 4.2% in June, but job creation was much lower than expected, dampening expectations of an imminent interest rate hike. This led to rises in oil and stock prices.
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The US unemployment rate dropped to 4.2% in June from 4.3% in May, according to the Labor Department. The decline surprised analysts who had expected the rate to remain unchanged. However, the US economy added only 57,000 jobs in June, far below the forecast of 114,000 and the 129,000 jobs added in May.
The data reduced market expectations for a rapid increase in interest rates. Steve Sosnick, an analyst at Interactive Brokers, noted that the jobs numbers were weak, reducing the likelihood of a rate hike in the near term. New Federal Reserve Chair Kevin Worsh had previously focused on price stability, but now the labor market data no longer suggests strength.
On Wall Street, stock indices showed mixed performance. The Dow Jones Industrial Average rose 1.1% to a new record of 52,900.07 points, while the Nasdaq Composite fell 0.8% to 25,832.67 points. The S&P 500 edged up slightly. European markets saw stronger gains: the FTSE 100 in London rose 1.7%, the CAC 40 in Paris rose 1.7%, and the DAX 30 in Frankfurt added 2.2% to a new record, also supported by an agreement on reforms in Germany's ruling coalition.
Oil prices rose slightly on Thursday: WTI crude in New York increased 0.2% to $68.69 per barrel, while Brent crude in London rose 0.3% to $71.80. Natural gas at the TTF hub in the Netherlands jumped 2.9% to €44.02 per megawatt-hour.
The US dollar weakened against the euro, British pound, and Japanese yen. The euro rose to $1.1429, the pound to $1.3345, and the dollar fell to 161.12 yen.
