Investors spent much of the past week fretting that the US jobs report would mark the end of the US recovery. As a result, the recent rally in global stocks lost steam. On Thursday, the dollar slid by 3 per cent against the yen, the sharpest one-day fall since July 2009.

However, better than expected figures – the labour market added 175,000 jobs in May – soothed these fears. The improvement was in line with the past 12 months, when the economy added 172,000 jobs per month. Unemployment ticked up – from 7.5 per cent to 7.6 per cent – but this is because more people are coming back into the jobs market, a sign of strength, not weakness.

Markets celebrated the lucky escape, with both US and European stocks moving upwards. The US recovery may be tepid, but it is not suffering too much from the indiscriminate cuts in public spending, also known as sequestration, that US politicians have imposed on the economy. While the number of government jobs shrank, the private sector more than made up for the contraction.