U.S. stock index futures soared after the government reported August nonfarm payrollsfell much less than expected, giving investors some hope about the health of the economy and employment.
Nonfarm payrolls fell 54,000 jobs in August and the unemployment rate rose to 9.6 percent. Economists surveyed by Reuters expected a decline of 100,000 in August. Private payrolls gained 67,000 jobs, better than the 41,000 expected.
"It’s not a great report, but it’s much better than the market was expecting," said Scott Brown, chief economist at Raymond James & Associates. "You are seeing job growth, but it’s really not enough."
Private sector payrolls rose by 67,000, far better than the 35,000 boost Brown had forecasted, but "well below that 135,000 or so that we need to keep pace with the growth of the working-age population," he said.
One encouraging sign is temp-help payrolls rose 17,000, meaning employers need additional workers they may be willing to hire fulltime in the future. Those payrolls had stalled in June and July after averaging a monthly gain of 45,000 from October to May, Brown said.
"It's still suggesting more of the same — positive job growth, but not especially strong," he said.
Also on the economic front, the Institute for Supply Management's non-manufacturing survey is released at 10 am New York time. The survey of services activity is expected to show a slight decline for August, after June's rise to 54.3.
At the same time, Atlanta Federal Reserve President Dennis Lockhart will discuss the economic outlook when he speaks in Johnson City, Tenn.
In other news, Campbell Soup announced earnings of 33 cents per share, three cents ahead of analyst estimates.
Hewlett-Packard shares edged higher a day after it officially beat rival Dell in the bidding war to acquire data storage company 3Par.
And Hurricane Earl pounded parts of the East Coast of America with wind, rain and surf after weakening slightly to a Category 4 storm.
European shares were higher and Asian stocks closed in the green after the positive close on Wall Street. But the employment data could affect sentiment in the later part of the European trading day.