2012 economic data continues on a positive note.

6th January 2012

Ian Copelin, Investment Director, my wealth, comments,“Yesterday an ADP Employer Services report showed US companies added 325,000 employees in December, nearly double the number economists had projected.

Today’s US jobless rate declined to a near three-year low, showing that the employment market gained momentum heading into 2012.  Government statistics showed employers added 200,000 employees – a Bloomberg survey suggested that the median projection was for a gain of 155,000.  Consequently, the unemployment rate unexpectedly fell to 8.5%, the lowest since February 2009, while hours worked and earnings both climbed.

This is a very positive sign:  sustained employment growth is needed to chip away at joblessness, which will help support household spending (which accounts for two-thirds of the world’s largest economy).

The fact the we have a had a number of better-than-expected economic data releases is a good sign that investors have become too gloomy as they focus on, and obsess about, the risks from Europe.  As I have said a number of times, recent stock market weakness has been caused by indiscriminate selling and as a result global equity markets are already pricing in something catastrophic and any good news should have a positive impact on the market.  Long may this good news continue!”