U.S. stock index futures signaled a slightly higher open on Friday, encouraged by a better-than-expected labor market report—a key indicator of the health of the U.S. economy.
The Labor Department said the United States created 257,000 jobs in January, beating estimates of about 230,000. More importantly, average hourly earnings grew by 0.5 percent, above estimates.
The unemployment rate rose to 5.7 percent, above estimates.
Futures turned higher on the news with Dow futures extending gains from 9 points to as much as more than 80 points. The U.S. 10-year Treasury note yield rose from about 1.80 percent to 1.91 percent.
Peter Boockvar, chief market analyst at The Lindsey Group, said in a note that "solid job growth continues."
"The Fed's game of rationalizing zero interest rates has no touch with reality," he said. "The reason, however, why this good job growth is not translating into faster GDP growth is because productivity is so poor, which means that 2015 could be the peak in corporate profit margins."
Thursday's reports showed non-farm productivity fell a greater-than-expected 1.8 percent for the fourth quarter. Economists had forecast productivity, which measures hourly output per worker, rising at a 0.5 percent pace.
The Labor Department had expected to report the creation of 230,000 nonfarm payrolls in January, with the unemployment rate holding steady at 5.6 percent and wage growth of 0.3 percent. Last month, a 0.20 percent decline, or a 5-cent drop, in hourly earnings jarred markets.