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Surprise: US jobs surge, outlook up

business Updated: Jan 05, 2011 23:40 IST

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A surprise surge in US private-sector employment last month to its highest level on record provided the most bullish signal in months that the US economy is mending.

Private employers added 297,000 jobs in December, triple the median estimate by economists and up from the gain of 92,000 in November, an ADP Employer Services report showed on Wednesday.

The news reduced early losses in US stock index futures, though the stock market was still expected to open lower. The jobs report helped send the price of the US 30-year Treasury bond a full point lower. “You cannot ignore the strength of this report,” Tom Porcelli, economist at RBC Capital Markets. “With small business beginning to start to ramp up hiring, it’s safe to feel better about the labour backdrop.”

Adding to the rosy picture, the number of planned layoffs at US firms fell last month to the lowest level in 10 years, according to a report by consultants Challenger, Gray & Christmas Inc. But applications for home mortgages ebbed in the last couple of months, with loan rates hovering around their highest levels in seven months.

The US dollar extended gains against the yen and the euro.