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| US jobs report misses forecasts; Opec agrees to cut oil output – business live | |
| (35 minutes later) | |
| European markets are holding onto their gains. | |
| With 30 minutes to go, the FTSE 100 is up 1.9% at 6831, a 127-point swing upwards. | |
| Here’s our US business editor Dominic Rushe on today’s US jobs report: | |
| America’s record breaking streak of job creation appears to be slowing. The Labor Department announced the US had added 155,000 in November, well below last month’s figures and economists’ forecasts. | |
| November was the 98th consecutive month of growth in hiring, the longest streak of jobs growth since records began. But the pace of hiring slowed dramatically last month. The US added 250,000 jobs in October and economists had expected 198,000 new jobs to be added this month. | |
| The unemployment rate remained at 3.7%, a low unseen since 1969, and the US is still adding around 200,000 jobs a month. But some market watchers believe the recovery is running out of steam. | |
| More here.... | |
| US jobs growth slows dramatically despite record streak | |
| Uh oh.... Wall Street is turning south. | |
| The Dow is now down 203 points, or around 0.8%, at 24,743 points. | |
| The Nasdaq is also in the red, down 1%, while the S&P 500 has lost 0.6%. | |
| Technology stocks are leading the sell-off, with IBM and Intel both down 2.2%, Apple losing 1.6% and Microsoft down 1%. | |
| Caterpillar, maker of construction equipment, is down 1.5% while Nike has lost 1.2%. | |
| Over in Vienna, Opec has finally agreed a deal to cut oil production. | Over in Vienna, Opec has finally agreed a deal to cut oil production. |
| After long, tense wrangling, the oil cartel has agreed to cut its production by 800,000 barrels per day. Non-member states (such as Russia) will cut their production by an extra 400,000, taking the total reduction to 1.2 million barrels per day. | After long, tense wrangling, the oil cartel has agreed to cut its production by 800,000 barrels per day. Non-member states (such as Russia) will cut their production by an extra 400,000, taking the total reduction to 1.2 million barrels per day. |
| News of the cut has sent crude prices rallying; Brent crude is up 5% to $63.15 per barrel, up three dollars. | News of the cut has sent crude prices rallying; Brent crude is up 5% to $63.15 per barrel, up three dollars. |
| #brent Crude oil prices jump 5% as OPEC decides to cut production. Rally till 70 is likely. Recovery in crude is also supporting recovery in global stock markets. #opecmeet #crudeoil pic.twitter.com/S3mqjjzqEs | #brent Crude oil prices jump 5% as OPEC decides to cut production. Rally till 70 is likely. Recovery in crude is also supporting recovery in global stock markets. #opecmeet #crudeoil pic.twitter.com/S3mqjjzqEs |
| Iran, Libya and Venezuela reportedly exempt from the decision. Iranian oil minister Bijan Namdar Zanganeh told the IRNA news agency: | Iran, Libya and Venezuela reportedly exempt from the decision. Iranian oil minister Bijan Namdar Zanganeh told the IRNA news agency: |
| “Negotiations were tough; thank God, we are pleased with this level of reduction in oil supply.” | “Negotiations were tough; thank God, we are pleased with this level of reduction in oil supply.” |
| Larry Kudlow, the head of Donald Trump’s national economic council, has declared that America’s economy is in a good spot. | Larry Kudlow, the head of Donald Trump’s national economic council, has declared that America’s economy is in a good spot. |
| Speaking on Bloomberg TV, Kudlow cited supply side growth, productivity improvements, tax cuts and deregulation, saying they could help the US economy keep growing solidly next year. | Speaking on Bloomberg TV, Kudlow cited supply side growth, productivity improvements, tax cuts and deregulation, saying they could help the US economy keep growing solidly next year. |
| Kudlow also suggested that the Federal Reserve had dialled down its interest rate hike plans (after plenty of pressure from the president). | Kudlow also suggested that the Federal Reserve had dialled down its interest rate hike plans (after plenty of pressure from the president). |
| Kudlow: the Fed people seem to be saying we have strong growth but it's coming from the supply side | Kudlow: the Fed people seem to be saying we have strong growth but it's coming from the supply side |
| Kudlow thinks a December hike might be "all for quite some time" for the Fed and that's quite in line with Trump's thinking | Kudlow thinks a December hike might be "all for quite some time" for the Fed and that's quite in line with Trump's thinking |
| Kudlow was also asked about the Huawei case -- is there any reason for US tech executives to worry about visiting China? | Kudlow was also asked about the Huawei case -- is there any reason for US tech executives to worry about visiting China? |
| All businesses operating in China need to keep eyes open, Kudlow replied. | All businesses operating in China need to keep eyes open, Kudlow replied. |
| He added that there is now widespread agreement that China must “change its ways and take a big reform position on the WTO”, thanks what he called a “trading coalition of the willing”. | He added that there is now widespread agreement that China must “change its ways and take a big reform position on the WTO”, thanks what he called a “trading coalition of the willing”. |
| Marina Mensah-Afoakwah, senior economist at the CEBR, suspects that the US Federal Reserve will vote to raise interest rates later this month. | Marina Mensah-Afoakwah, senior economist at the CEBR, suspects that the US Federal Reserve will vote to raise interest rates later this month. |
| While today’s figures in isolation may not give a reason for concern, the context in which they have arisen could cause some anxiety. | While today’s figures in isolation may not give a reason for concern, the context in which they have arisen could cause some anxiety. |
| If the weak global outlook persists amid current trade tensions, future job growth in the US may continue to disappoint.” | If the weak global outlook persists amid current trade tensions, future job growth in the US may continue to disappoint.” |
| She also sent over this chart, showing how the US unemployment rate has fallen steadily to just 3.7%, the lowest since 1969. | She also sent over this chart, showing how the US unemployment rate has fallen steadily to just 3.7%, the lowest since 1969. |
| The Dow is pushing higher.... now up 120 points, as New York investors recover their nerve. But will it last?... | The Dow is pushing higher.... now up 120 points, as New York investors recover their nerve. But will it last?... |
| So far, so calm..... | So far, so calm..... |
| Stocks mostly higher in early trading after weaker-than-expected jobs report https://t.co/aaSJKDTQda pic.twitter.com/aXwPQE2rf7 | Stocks mostly higher in early trading after weaker-than-expected jobs report https://t.co/aaSJKDTQda pic.twitter.com/aXwPQE2rf7 |
| This time yesterday, Wall Street was falling heavily as global markets were riled by the arrest of Huawei’s CFO. | This time yesterday, Wall Street was falling heavily as global markets were riled by the arrest of Huawei’s CFO. |
| Today things are calmer, thanks to the jobs report. | Today things are calmer, thanks to the jobs report. |
| The Dow has crept up by 18 points, or 0.07% to 24,966. | The Dow has crept up by 18 points, or 0.07% to 24,966. |
| That’s a teensy tiny move, but the significant point is that the New York stock exchange hasn’t fallen back towards yesterday’s lows (the Dow fell 780 points, but only closed 79 points lower). | That’s a teensy tiny move, but the significant point is that the New York stock exchange hasn’t fallen back towards yesterday’s lows (the Dow fell 780 points, but only closed 79 points lower). |
| Today’s jobs report shows that the US economy is slowing, but not drastically, says Paul Ashworth of Capital Economics. | Today’s jobs report shows that the US economy is slowing, but not drastically, says Paul Ashworth of Capital Economics. |
| He’s written a thorough note on November’s Non-Farm Payroll....and here it is: | He’s written a thorough note on November’s Non-Farm Payroll....and here it is: |
| The slightly more modest 155,000 gain in payroll employment in November may not go down well in markets given the heightened nervousness in recent months, but this is still a solid gain that suggests economic growth is gradually slowing back towards its potential pace. | The slightly more modest 155,000 gain in payroll employment in November may not go down well in markets given the heightened nervousness in recent months, but this is still a solid gain that suggests economic growth is gradually slowing back towards its potential pace. |
| There is nothing here to suggest the economy is suffering a more sudden downturn. | There is nothing here to suggest the economy is suffering a more sudden downturn. |
| Admittedly, 155,000 was below the consensus forecast at 200,000 and the six-month average, which was slightly above 200,000. But gains of that magnitude should still be enough to keep the unemployment rate grinding lower. Looking at the employment breakdown, manufacturing increased by a healthy 27,000, retail added 18,000 and transportation added 25,000 (including 10,000 couriers ahead of the Holiday season). Leisure & hospitality added only 15,000, however, and education & health added only 34,000. Both below normal. State governments also shed 13,000 employees. | Admittedly, 155,000 was below the consensus forecast at 200,000 and the six-month average, which was slightly above 200,000. But gains of that magnitude should still be enough to keep the unemployment rate grinding lower. Looking at the employment breakdown, manufacturing increased by a healthy 27,000, retail added 18,000 and transportation added 25,000 (including 10,000 couriers ahead of the Holiday season). Leisure & hospitality added only 15,000, however, and education & health added only 34,000. Both below normal. State governments also shed 13,000 employees. |
| The unemployment rate was unchanged at only 3.7% last month, as a 233,000 gain in the household survey measure of employment more than offset a 133,000 increase in the labour force. That said, the broader U6 measure of unemployment did rebound to 7.6%, from 7.4%. Average hourly earnings increased by 0.2% m/m in November, with the annual growth rate unchanged at 3.1%. | The unemployment rate was unchanged at only 3.7% last month, as a 233,000 gain in the household survey measure of employment more than offset a 133,000 increase in the labour force. That said, the broader U6 measure of unemployment did rebound to 7.6%, from 7.4%. Average hourly earnings increased by 0.2% m/m in November, with the annual growth rate unchanged at 3.1%. |
| Overall, employment growth may be fading a little from the unsustainable pace in the first half of this year, but there is nothing here to unduly worry the Fed or prevent it from hiking interest rates at this month’s FOMC meeting. | Overall, employment growth may be fading a little from the unsustainable pace in the first half of this year, but there is nothing here to unduly worry the Fed or prevent it from hiking interest rates at this month’s FOMC meeting. |
| The European stock markets are all pushing higher, clawing back more of yesterday’s losses. | The European stock markets are all pushing higher, clawing back more of yesterday’s losses. |
| Britain’s FTSE 100 is leading the way, up almost 2%, with solid gains on Germany’s DAX (0.8%) and France’s CAC (+1.5%). | Britain’s FTSE 100 is leading the way, up almost 2%, with solid gains on Germany’s DAX (0.8%) and France’s CAC (+1.5%). |
| This seems to confirm that traders are relieved that the US economy is still creating jobs, but not so rapidly to force several interest rate hikes in 2019. | This seems to confirm that traders are relieved that the US economy is still creating jobs, but not so rapidly to force several interest rate hikes in 2019. |