Markets find some cheer in US job numbers

WASHINGTON, Nov 5 (Reuters): Employers in the US hired fewer workers in October but the jobless rate fell to a six-month low and job gains in the prior two months were stronger than previously thought, pointing to some improvement in the still-weak labour market. Non-farm payrolls rose 80,000 last month, the Labour Department said yesterday, missing economists' expectations for a gain of 95,000. However, August and September were revised to show 102,000 more jobs than previously reported. In addition, the small drop in the jobless rate to 9 per cent from 9.1 per cent came even as more people entered the labour force. 'It's not a game-changer but when you take into account the upward revision to prior months and the drop in the unemployment rate, it's a step in the right direction,' said John Canally, an economist at LPL Financial in New York. US stocks opened lower, as traders kept a wary eye on efforts to tame Europe's debt crisis, while US Treasury debt prices initially fell but then erased losses. The US dollar also fell briefly against the euro, but then resumed earlier gains on unease over Europe. The labour market remains the Achilles heel of the economic recovery, and progress at putting the 13.9 million unemployed Americans back to work remains painfully slow. The slight improvements in the labour market hinted at by yesterday's report will likely do little to take the pressure off US President Barack Obama, who faces a tough fight for re-election next year. However, they may be enough to keep the Federal Reserve on the sidelines as it considers whether the economy could benefit from a further quantitative easing of monetary policy. 'The latest data is strong enough that it will kill off thoughts of a QE3 Christmas present for global markets,' said Alan Ruskin, global head of G10 foreign exchange strategy at Deutsche Bank in New York.