LONDON — A mixed U.S. jobs report took the edge off global stock markets Friday as it raised questions over the pace of growth in the world's largest economy and when the U.S. Federal Reserve will start reducing its monetary stimulus.
The U.S. economy added a net 162,000 jobs in July, the fewest since March and below analyst expectations for an 183,000 increase. The previous two months' gains, meanwhile, were revised down.
The hiring was nevertheless strong enough to lower the unemployment rate to a 4 ½ -year low of 7.4 percent, from 7.6 percent. Forecasts were for a more modest dip to 7.5 percent.
The payrolls figures are often the most important piece of economic news that investors have to digest every month. That may be more so now as investors try and gauge when the Fed will start to reduce its monetary stimulus.
The Fed has already stated that a reduction in the current $85 billion worth of asset purchases it is making every month is on the cards. The Fed has been pumping money into the U.S. economy for over four years in an effort to keep interest rates down and help boost the economy.
Analysts are divided over whether the so-called tapering will occur in September or later.
"The report leaves the market hankering for further clues surrounding tapering," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.
Europe lost its early gains to trade lower, with Germany's DAX down 0.2 percent at 8,392.85 and France's CAC 40 dropping 0.1 percent to 4,038.47. Britain's FTSE 100 fell 0.6 percent to 6,641.38 as Royal Bank of Scotland shares shed 4.5 percent on disappointing earnings.
