Global headline shares continue to swing between gains and losses despite the US unemployment rate dropping to 7.4% from 7.5%. It seems the fact that the market-moving nonfarm figure which showed there was only an increase of 162,000 employed people last month compared to an expected figure of 184,000 shook sentiment. The figure was particularly disappointing as there has been a string of encouraging data from the US this week including better-then-expected weekly unemployment data as well as manufacturing data.
However, investors’ taste for equities could have been soured by data which showed that the US unemployment rate dropped. One of the key condition US policy officials have highlighted for the tapering of stimulus measures is an improvement within the labour market. Since, arguably, the reduction in the unemployment rate fulfils this condition then the selloff could be explained by the possibility that US officials now have a reason to slow-down with stimulus measures.