European shares close lower after the US jobs report

Friday, August 05, 2022 - 20:16
Point Trader Group
European shares close lower after the US jobs report

European markets closed lower on Friday afternoon after a major jobs report in the US showed unexpected strength in the labor market.

The pan-European Stoxx 600 closed down 0.8% shortly after the US Bureau of Labor Statistics data, technology stocks fell 2.4% as most major sectors and stock exchanges slipped into negative territory.

Nonfarm payrolls in the US rose by 528,000 in July, well above the 258,000 forecast by Dow Jones estimates and defying signs that the economic recovery is fading.

Investors will interpret the show of strength as increasing the likelihood that the Fed will act more aggressively to bring down inflation, as the risk of such an action pushing the economy into recession diminishes.

The markets were trading sideways this week, as investors reacted to a slew of corporate earnings.

This week, the Bank of England on Thursday raised interest rates by 50 basis points while expecting UK inflation to peak above 13% in October and the economy to enter a prolonged recession in the fourth quarter.

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