A US government report yesterday assuaged fears of a rise in interest rates by revealing that solid gains in the labour market failed to ignite inflationary wage pressures in April.
In its most widely watched set of monthly economic data, the Labour Department said the number of jobs outside the farm sector grew a solid 234,000 in April. The unemployment rate crept up to 4.3 per cent from 4.2 the previous month, while hourly earnings rose only slightly.
Financial markets initially greeted the report with relief, but Federal Reserve chairman Alan Greenspan's warning on Thursday that the nation's tight jobs market had raised the danger of a treacherous inflationary spiral cast a spectre over the encouraging report.
Following its release, US stocks opened higher as investors took heart from signs of unfailing strength in the economy.
" The American economy continues to see a remarkable combination of strong growth, job creation and low inflation," President Bill Clinton said of the report.
Despite overall strength in the labour market, the nation's battered manufacturing industry showed no signs of a rebound.
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