Stocks surge after 'stunning' US jobs numbers

Oscar Williams-Grut
·Senior City Correspondent, Yahoo Finance UK
Updated ·2 min read
MIAMI BEACH, FLORIDA - MAY 22: Odirus Charles holds a sign that reads, ' I Am angry as hell Fix Unemployment Now,' as he joins others in a protest on May 22, 2020 in Miami Beach, Florida. Unemployed hospitality and service workers who have not received unemployment checks held the protest demanding Florida Governor Ron DeSantis fix the unemployment system and send out their benefits. Since the closure of all non-essential businesses due to the coronavirus pandemic, hundreds of thousands of hospitality workers across Florida find themselves out of work. Florida’s unemployment system has not worked reliably. (Photo by Joe Raedle/Getty Images)
Odirus Charles holds a sign that reads, ' I Am angry as hell Fix Unemployment Now,' as he joins others in a protest on May 22, 2020 in Miami Beach, Florida. (Joe Raedle/Getty Images)

Global stock markets surged on Friday, after the US reported better-than-expected jobs numbers.

The May jobs report showed the US economy unexpectedly added 2.5 million new jobs last month and the headline unemployment rate fell to 13.3%.

Economists had expected 8 million jobs to be lost in May and forecast a rise in unemployment to 19%.

US President Donald Trump tweeted multiple times about the numbers, calling them “incredible”, “stunning”, “stupendous”, and “amazing.”

“These figures have quite simply caught everyone off guard,” said Robert Alster, head of investment services at wealth manager Close Brothers Asset Management.

“To add more than two and a half million jobs is, quite frankly, a stunning result and seems, certainly on the face of things, to back-up the economic justification for an early ‘un-lockdown.’”

The unexpected numbers sent stock markets around the world surging. European markets had been between 0.5% and 1.5% higher ahead of the figures but leapt after the numbers were published.

The FTSE 100 (^FTSE) ended the day up 2.2%, while the DAX (^GDAXI) closed up 3.3% and the CAC 40 (^FCHI) had gained 3.6%.

US stocks also leapt higher. The S&P 500 (^GSPC) was up 2.8% by the time European markets closed, while the Dow Jones Industrial Average (^DJI) climbed 3.6% and the Nasdaq (^IXIC) was up 1.9%.

“Virtually no one had expected a positive number, let alone 2.5 million job gains, which helped to lower the unemployment rate to 13.3%,” said Fawad Razaqzada, a market analyst at ThinkMarkets.

“If the numbers are accurate, this suggests the economy is turning around faster than most people had expected.

“But at the same time let’s not draw too many conclusions from just one jobs report. We now want to see continued job gains and improvements in other macro data in the weeks and months ahead.”

Overnight in Asia, Japan’s Nikkei (^N225) had risen 0.7%, while the Hong Kong Hang Seng (^HSI) gained 0.9%, and China’s Shanghai Composite index (000001.SS) rose by 0.4%.