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Shares clawed their way up to a high for this year after official figures showed the unemployment rate in the US fell for the first time since last April.
In a market where any good news is eagerly seized upon, the non-farm payroll figures from the world's biggest economy led the FTSE-100 index to reverse a poor morning with a jump of more than 40 points in the seconds after their release.
Having been sharply down for most of the morning, the Footsie was this afternoon up 15.25 points at 4705.78 points.
US employers cut 247,000 jobs in July, compared with 443,000 in June. That was a far better picture than economists had expected. The rate of unemployment fell to 9.4% from 9.5%. “We have in motion a turnaround in the labour market,” said UBS economist James O'Sullivan.
Unemployment is a key element of the economic recovery in the US, where consumer spending forms the most important proportion of growth.
President Obama said the figures could hail the beginning of the end of the recession.
He said: “We're losing jobs at half the rate we were at the beginning of this year.
“Our financial system is no longer on the verge of collapse. The market is up.”
Analysts said some of the improvement came from the return to work of employees at General Motors and Chrysler, both of which have come out of bankruptcy after near-collapse.
