Wall Street shares have surged ahead after the latest jobs data eased concerns that higher inflation could put further upward pressure on interest rates.
The Dow Jones Industrial Average gained almost 2.2 per cent in strong trading last night.
Meanwhile, the Nasdaq index, dominated by technology stocks, stormed ahead by almost 4 per cent.
Investors will hope that the gains on Wall Street, which followed a nervous week in the US markets, will follow through to the European markets next week.
However, European markets will lack guidance from across the Atlantic on Monday, with the US markets closed for a long weekend.
The figures showed that US job growth slowed markedly last month and wage pressures eased, dispelling much of the alarm in financial markets over fears that inflation could be returning to the buoyant American economy.
Non-agricultural payrolls rose by a seasonally adjusted 124,000 in August, down from an average of more than 300,000 in the previous two months, the Labor Department reported yesterday.
And, while the unemployment rate dipped to a 29-year low of 4.2 per cent, average hourly earnings were just 3.5 per cent higher than a year earlier, down from a 3.8 per cent annual rate in July.
The report ended a week of worries on Wall Street about rising inflationary pressures and another possible interest rate increase next month from the Federal Reserve.
At 1 p.m., the Dow Jones Industrial Average was up 220 points at 11,063, reversing much of the loss of the previous week. It held on to these gains in later trading, closing up 235.24 points at 11,078.45. The Nasdaq index gained 3.96 per cent to 2,842.5.
Bond prices surged, with the yield on the benchmark 30-year Treasury dropping from 6.13 per cent before the report's publication to 6.02 per cent shortly afterwards. Behind the euphoria was relief at what most economists believe was clear evidence of a cooling of recent emerging inflationary pressures.
After several years of muted wage increases, scattered but unmistakable indications of a resurgence in labour costs have appeared in the past few months, unnerving financial markets and forcing the Federal Reserve to raise interest rates twice.
In the three months to June, unit labour costs rose at an annual rate of 4.5 per cent, the biggest increase in five years. In the same period, productivity, which had been growing strongly in the past two years, was stagnant. And last month, the Labour Department reported a further jump in wage pressures and a surge in job growth.
Confronted with these hints that the long period of non-inflationary growth might be drawing to an end, the Fed raised short-term interest rates by a quarter of a percentage point in June, and then again last week. Investors had begun to fear it might opt for a third rate rise when it next meets on October 5th.
But yesterday's report strongly indicated the upward wage pressures of the second quarter had not, in fact, carried through into the past two months.
Not only was employment growth back to a level most economists regard as sustainable without placing intolerable strains on the labour market, but wage inflation dropped sharply, well below the levels of a year ago.
The improved picture of US wage inflation does not yet mean an end to immediate interest rate worries, however. The US labour market remains stretched and policy-makers will watch closely for any other evidence of inflationary pressures in the next month. "The August employment report may be just good enough to keep the Fed on hold at the October 5th [Federal Open Market Committee] meeting," Merrill Lynch's chief economist, Mr Bruce Steinberg, told investors in a market report yesterday.
A strong economy with little inflation means "earnings, earnings, earnings will be the story for the rest of the year - and they're going to be good," said Mr John Cleland, the chief investment strategist at Security Benefit Group of Companies.
