US jobs data beats forecasts

US jobs data provided some much needed respite for investors on Friday, after the latest figures beat estimates.

July's non-farm payrolls showed 117,000 new jobs had been created, with the unemployment rate dipping to 9.1%.

Markets had been under the cosh prior to the release, with the FTSE 100 down about 2% and European shares also weaker.

However the FTSE appeared to be regaining some ground after the results, moving back up to 5,361 points. It was much firmer than the low point of the day just after markets opened, when the blue chip index dropped to 5,218.

The jobs data, released by the US Department of Labor, also revised upwards figures for May and June, with an additional 56,000 jobs added on top of previous estimates.

July's figure was well above estimates, economists having forecast 85,000 new jobs according to a survey by Reuters.

It comes after some of the sharpest losses seen on Wall Street and around the globe for years.

Immediately after the release, US futures were indicating a higher opening, in a sign the nine day sell-off could be halted.

David Miller, partner at Cheviot Asset Management, said the increase showed corporate America is in good shape.

He said: "After what has been a turbulent financial week, today's positive non-farm payroll figures will be better news for British investors.

"The US labour market responds faster than European ones which was why when last month this indicator was well below what economists' forecast, this was badly received One month's poor data is not critical, but two months would have a greater effect on the markets."