A strong US jobs market spells more volatility and pain for Australian investors, with local fund managers saying recent economic data leaves little doubt the Federal Reserve will maintain an aggressive approach to raising rates.

Wall Street slumped on Friday after monthly non-farm payroll data for September showed that while jobs growth was slowing, the number of new jobs rose at a faster pace than the market was anticipating. The US unemployment rate declined to 3.5 per cent.

The figures boosted investor fears that America’s central bank is left with little choice but to continue to hike rates in a bid to curb inflation - a move which could lead the nation into recession.

Local fund managers say Australian investors must now grapple with the possibility that good economic news, such as strong jobs data, means tough conditions for equities.

“The US labour market is like Rocky Balboa at the moment – it’s taking all the punches from the Fed but it just won’t go down to the canvas yet,” co-founder and senior portfolio manager at Ophir Asset Management, Andrew Mitchell, said.

“There was nothing in Friday’s employment data to stop them delivering another super-sized 0.75 per cent increase to rates. This is only adding to further downwards pressure on the Aussie dollar versus the USD and flowing on from that further imported inflation domestically.”

The Australian dollar was sitting at 63.91 US cents on Sunday morning, a decline of 6.7 per cent for the month.

The ASX200 rallied last Tuesday after the Reserve Bank of Australia came in below expectations with a 25 basis point increase to the cash rate.

Chief investment officer at Australian Eagle Asset Management, Sean Sequeira, said the data seen in the US last week will mean “general volatility will remain high for some time” locally.