he US economy created 200,000 jobs in December, improving President Barack Obama’s chances of re-election and the world’s hopes of avoiding a new recession triggered by the crisis in the eurozone.
Jobs growth was strong enough to drive the headline unemployment rate down from 8.7 per cent to 8.5 per cent, the lowest since February 2009, shortly after Mr Obama was inaugurated.
The data confirms that US growth has picked up at a crucial moment when the world is threatened by the eurozone’s sovereign debt problems and a slowdown in China. Analysts said it may herald a new phase for global currency markets.
The dollar index rallied to its highest level in 16 months as investors speculated that better data made it less likely that the Federal Reserve would conduct further quantitative easing, which would create money to pump into the economy. For much of last year, the dollar fell when investors’ appetite for risk increased...........
Eurozone jobless rate raises recession fears
Eurozone unemployment surged to a fresh record late last year as economic confidence tumbled to a two-year low and even Germany’s robust industrial sector showed signs of weakness, according to official data on Friday, which pointed to a marked contraction in activity in the final months of 2011.
The latest gloomy economic news indicated the 17-country monetary union was being buffered badly by worries over its debt crisis as well as fiscal austerity measures and slower global growth – with Italy among its worst hit member states. That could add to fears of a pronounced recession and fuel speculation that the European Central Bank will have to take bolder measures to avert a slump, including by launching its own version of “quantitative easing”.