Mark Zandi, the chief economist of Moody's Analytics, said: "The job market remains sturdy in the face of significant fiscal headwinds. Businesses are adding to payrolls more strongly at the start of 2013 with gains across all industries and business sizes. Tax increases and government spending cuts don't appear to be affecting the job market."
The jobs figures and better than expected figures from the service sector helped drive up US stock markets this week. On Tuesday, the Dow Jones industrial average passed levels unseen since before the financial crisis.
In the UK, the stock market shrugged off poor construction figures to reach 6,483, up 44 points. The Office for National Statistics said output fell by 6.3% month on month having fallen by 16.3% in December from November. Worryingly for the chancellor, George Osborne, the figures revealed a sharp fall in infrastructure and civil engineering projects.
Alan Clarke, chief UK economist at Scotia Bank, warned that a triple dip recession was back on the cards without a major boost from other areas of the economy.
The German Dax and French Cac also nudged ahead as large firms, like their UK counterparts, looked ahead to better exports on the back of better news from the US. The US remains the world's largest economy and an important market for European goods.
Even the Italian stock market bounced after the non-farm payroll results, shaking off a credit downgrade that kept the country a few notches above junk status.
Fitch, which downgraded Italy's bond rating to BBB+, from A- with a negative outlook, said: "The increased political uncertainty and non-conducive backdrop for further structural reform measures constitute a further adverse shock to the real economy amidst the deep recession."
The agency expects Italy's output will shrink by 1.8% this year, as Europe's fourth-largest economy struggles in the throes of deepening recession.
1 comment:
The Marxian concept is the 'withering away of the state' but this only happens after a long period of socialism, then (it goes), with the state become the people, this is communism and the end of class struggle. The mistake usually made (deliberately most of the time) in the media is to assume that 'communist' societies have existed already, but so far we have only seen socialism with continued class antagonisms. It is, nevertheless, a feature (and error) of Stalinism to believe that communism had arrived in socialism, and that class struggle was abolished in the Soviet Union, post war.
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