This article is from the source 'guardian' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.theguardian.com/business/live/2019/jun/07/slowdown-german-factory-output-exports-growth-us-jobs-markets-business-live

The article has changed 8 times. There is an RSS feed of changes available.

Version 5 Version 6
US economy stumbles by creating just 75,000 jobs in May - business live US economy stumbles by creating just 75,000 jobs in May - business live
(32 minutes later)
Time for a recap
Job creation slowed sharply in America last month. Just 75,000 new jobs were created in May, down from 224,000 created in April. Economists had expected 175,000 to be created.
May’s Non-Farm Payroll also shows that earnings growth was also disappointing, at just 0.2% month-on-month and 3.1% year-on-year.
That’s a blow to hopes that American families would benefit from rising wages, to help them handle price rises from the US-China trade war.
US average hourly earnings growth turned down in May from 3.2%Y/Y to 3.1%. #NFP pic.twitter.com/FHwLfrtpGr
More encouragingly, the jobless rate remained at its lowest since 1969, at just 3.6%.
The government payroll actually shrank by 15,000, while manufacturing only created a few thousands jobs. Details here.
The figures suggest that the US economy is weakening, as trade disputes with China hurt demand.
Guy Foster, head of research at Brewin Dolphin says the report is worryingly weak.
“Market’s wanted a soft jobs report, but not quite this soft. It’s too cold for a Goldilocks economy
Andrew Hunter of Capital Economics called the report “another sign that economic growth is slowing”, adding:
On balance, we still think Fed officials will want to see evidence of more sustained weakness before taking action, but we are increasingly convinced that the Fed will begin cutting interest rates later this year.
However,Kevin Hassett, head of the president’s Council of Economic Advisors, denies that the escalation in the US-China trade war caused the drop in jobs creation.
It’s hard to believe that a roadblock in the Chinese talks could have a major macroeconomic effect.
The US dollar has fallen sharply, as traders bet that the US Federal Reserve will be forced to cut interest rates this summer - and perhaps twice this year.
This has pushed shares higher on Wall Street, as lower borrowing costs are usually good for asset prices. The Dow is up 1%, as stocks shake off recent gloom.
Investors have also piled into government bonds, driving down the yield on US treasury bills.
US futures flying this afternoon:#DOW 26005.44 +1.11%#SPX 2877.15 +1.18%#NDX 7413.99 +1.90%#VIX 15.84 -0.56% pic.twitter.com/qRdOP99Viw
European stock markets are also roaring higher (as traders look longingly towards the end of the week).European stock markets are also roaring higher (as traders look longingly towards the end of the week).
In London the FTSE 100 is up 82 points, on hopes that a US interest rate cut might boost the global economy.In London the FTSE 100 is up 82 points, on hopes that a US interest rate cut might boost the global economy.
Wall Street is pushing higher; the Dow is now up 259 points or 1% at 25,980.Wall Street is pushing higher; the Dow is now up 259 points or 1% at 25,980.
S&P 500 gains more than 1% as weak jobs growth spurs rate cut bet https://t.co/2lV78SsiUJ pic.twitter.com/XGUpH4LD8zS&P 500 gains more than 1% as weak jobs growth spurs rate cut bet https://t.co/2lV78SsiUJ pic.twitter.com/XGUpH4LD8z
One more weak jobs report and the Fed could cut borrowing costs, predicts Ronald Temple, Head of US equity at Lazard Asset Management:One more weak jobs report and the Fed could cut borrowing costs, predicts Ronald Temple, Head of US equity at Lazard Asset Management:
“The Fed has already set the stage for easing based on below-target inflation and escalating trade tensions. If tariffs increase as currently scheduled and we get another sluggish job report next month, I believe that it would be difficult to criticize a rate cut on July 31.“The Fed has already set the stage for easing based on below-target inflation and escalating trade tensions. If tariffs increase as currently scheduled and we get another sluggish job report next month, I believe that it would be difficult to criticize a rate cut on July 31.
Donald Trump’s top economic advisor (for a little longer anyway) is discussing the jobs report on Bloomberg TV.Donald Trump’s top economic advisor (for a little longer anyway) is discussing the jobs report on Bloomberg TV.
Kevin Hassett, head of the Council of Economic Advisors, denies that the escalation in the US-China trade war caused the drop in jobs creation.Kevin Hassett, head of the Council of Economic Advisors, denies that the escalation in the US-China trade war caused the drop in jobs creation.
It’s hard to believe that a roadblock in the Chinese talks could have a major macroeconomic effect.It’s hard to believe that a roadblock in the Chinese talks could have a major macroeconomic effect.
Hassett concedes, though, that economic uncertainty can be a threat to the economy.Hassett concedes, though, that economic uncertainty can be a threat to the economy.
He also suggests that bad weather was a factor.He also suggests that bad weather was a factor.
White House economist Kevin Hassett blames flooding in the Midwest for the disappointing jobs number, not trade tensions, via @BloombergTV @FerroTVWhite House economist Kevin Hassett blames flooding in the Midwest for the disappointing jobs number, not trade tensions, via @BloombergTV @FerroTV
Hassett also faces questions about his decision to resign this week -- is he unhappy about Donald Trump’s plan to impose tariffs on Mexico unless it curbs migration?Hassett also faces questions about his decision to resign this week -- is he unhappy about Donald Trump’s plan to impose tariffs on Mexico unless it curbs migration?
Hassett refuses to reveal what he said to the president about the plan, insisting instead that Trump is right to emphasise border security reform.Hassett refuses to reveal what he said to the president about the plan, insisting instead that Trump is right to emphasise border security reform.
But he does reveal that Trump will be briefed on this week’s negotiations with Mexican official when he returns from his trip to Europe tonight.But he does reveal that Trump will be briefed on this week’s negotiations with Mexican official when he returns from his trip to Europe tonight.
Hassett: Trump will be briefed on the discussions with Mexico when he lands today at 4:30 returning from Europe and he will make a decision then.Hassett: Trump will be briefed on the discussions with Mexico when he lands today at 4:30 returning from Europe and he will make a decision then.
But did you resign because you’re unhappy about the Mexican tariffs?But did you resign because you’re unhappy about the Mexican tariffs?
They’re “utterly separate things”, Hassett smiles, saying he wants to spend more time with his family.....They’re “utterly separate things”, Hassett smiles, saying he wants to spend more time with his family.....
Ding ding! The New York stock market is open for business, and shares are rising.Ding ding! The New York stock market is open for business, and shares are rising.
Investors are shrugging off the weak jobs report (details start here), and banking that the Federal Reserve will ride to the rescue with an interest rate cut soon.Investors are shrugging off the weak jobs report (details start here), and banking that the Federal Reserve will ride to the rescue with an interest rate cut soon.
Here’s the early prices:Here’s the early prices:
Dow Jones industrial average: up 119 points or 0.46% at 25,840Dow Jones industrial average: up 119 points or 0.46% at 25,840
S&P 500: up 13 points or 0.48% at 2,857S&P 500: up 13 points or 0.48% at 2,857
Nasdaq: up 40 points or 0.55% at 7,656Nasdaq: up 40 points or 0.55% at 7,656
Stephen Hubble, Chief Analyst at Centtrip, suspects the first cut could come later this month:Stephen Hubble, Chief Analyst at Centtrip, suspects the first cut could come later this month:
“Disappointing non-farm payrolls have now joined inflation and trade tensions as matters of concern for the US economy. 75,000 jobs were added in May against an average forecast of 175,000, which shows that the poor read in February was not just a one-off blip and that Trump’s tariffs rhetoric is highly likely to be having a negative impact on the much-lauded US labour market.“Disappointing non-farm payrolls have now joined inflation and trade tensions as matters of concern for the US economy. 75,000 jobs were added in May against an average forecast of 175,000, which shows that the poor read in February was not just a one-off blip and that Trump’s tariffs rhetoric is highly likely to be having a negative impact on the much-lauded US labour market.
“What will the Fed’s response be when it convenes for a regular meeting on 19 June? Will it change its forward guidance, increasing the likelihood of an interest rate cut in July? Or it may decide to bite the bullet and get ahead of the market.”“What will the Fed’s response be when it convenes for a regular meeting on 19 June? Will it change its forward guidance, increasing the likelihood of an interest rate cut in July? Or it may decide to bite the bullet and get ahead of the market.”
This neat chart shows how America’s economy has been creating jobs steadily since the end of the last recession a decade ago - matching the rise in stocks.This neat chart shows how America’s economy has been creating jobs steadily since the end of the last recession a decade ago - matching the rise in stocks.
Update to one of my favorite charts. NFP in blue and Russell 3000 in red. cc @TheStalwart pic.twitter.com/vS7jM9LMYyUpdate to one of my favorite charts. NFP in blue and Russell 3000 in red. cc @TheStalwart pic.twitter.com/vS7jM9LMYy
Josie Dent, senior economist at the CEBR thinktank, also spies a US interest rate cut on the horizon.....Josie Dent, senior economist at the CEBR thinktank, also spies a US interest rate cut on the horizon.....
She says:She says:
Positive economic growth in Q2 2019 will mark the 10th year of continuous expansion of the US economy. However after today’s labour market release, few people will be celebrating. With markets also spooked by the trade war, the Federal Reserve Open Market Committee (FOMC) is under pressure to cut rates.Positive economic growth in Q2 2019 will mark the 10th year of continuous expansion of the US economy. However after today’s labour market release, few people will be celebrating. With markets also spooked by the trade war, the Federal Reserve Open Market Committee (FOMC) is under pressure to cut rates.
This could come as soon as next month.”This could come as soon as next month.”
Several financial experts are predicting that the US Federal Reserve will cut interest rates, perhaps twice, before the end of 2019.Several financial experts are predicting that the US Federal Reserve will cut interest rates, perhaps twice, before the end of 2019.
US interest rates are currently 2.5%, having been hiked four times in 2017 and again in 2018. That’s much higher than in rival advanced economies such as the eurozone (0%) and the UK (0.75%).US interest rates are currently 2.5%, having been hiked four times in 2017 and again in 2018. That’s much higher than in rival advanced economies such as the eurozone (0%) and the UK (0.75%).
Earlier this week, Federal Reserve chair Powell promised to act appropriately to protect growth. Today’s weak jobs report piles more pressure on the Fed to start a cutting cycle soon.Earlier this week, Federal Reserve chair Powell promised to act appropriately to protect growth. Today’s weak jobs report piles more pressure on the Fed to start a cutting cycle soon.
Anthony Kurukgy, Senior Sales Trader at Foenix Partners, saysAnthony Kurukgy, Senior Sales Trader at Foenix Partners, says
Fed Chair Jay Powell spooked investors this week as he pointed towards a potential rate cut as part of a dovish repositioning among major central banks, amid fears of faltering global economic growth.Fed Chair Jay Powell spooked investors this week as he pointed towards a potential rate cut as part of a dovish repositioning among major central banks, amid fears of faltering global economic growth.
Given today’s missed labour and earnings data, a continued downtrend in the jobs market may force the US Central Bank to unwind some of 2018’s rate hikes in the second half of 2019.Given today’s missed labour and earnings data, a continued downtrend in the jobs market may force the US Central Bank to unwind some of 2018’s rate hikes in the second half of 2019.
Mkts now price 3.3 rate cuts within the next 12mths following bad US jobs report. pic.twitter.com/xulYL6wFqxMkts now price 3.3 rate cuts within the next 12mths following bad US jobs report. pic.twitter.com/xulYL6wFqx
This weak jobs report is another sign that Donald Trump’s trade war with China is hurting the US economy.This weak jobs report is another sign that Donald Trump’s trade war with China is hurting the US economy.
Richard Flynn, UK Managing Director at Charles Schwab, says trade tensions are a key worry.Richard Flynn, UK Managing Director at Charles Schwab, says trade tensions are a key worry.
“Today’s disappointing job numbers come hot on the heels of last week’s GDP figures, where economic growth was revised down, albeit by less than expected. However, in general the US economy has remained robust in recent months in spite of escalating trade tensions and global headwinds.“Today’s disappointing job numbers come hot on the heels of last week’s GDP figures, where economic growth was revised down, albeit by less than expected. However, in general the US economy has remained robust in recent months in spite of escalating trade tensions and global headwinds.
“The ongoing concern facing investors is the back and forth around rising tariffs from both sides of the U.S.-China trade dispute, with the ball currently in the Americans’ court. The near-term impact on the market is easy to see but determining the longer-term economic impact is more difficult.“The ongoing concern facing investors is the back and forth around rising tariffs from both sides of the U.S.-China trade dispute, with the ball currently in the Americans’ court. The near-term impact on the market is easy to see but determining the longer-term economic impact is more difficult.
Let’s get some details on the weakest US jobs report in three months.Let’s get some details on the weakest US jobs report in three months.
The government cut 15,000 jobs in May, according to the Bureau of Labor Statistics, while private companies hired 90,000 people.The government cut 15,000 jobs in May, according to the Bureau of Labor Statistics, while private companies hired 90,000 people.
Services companies took on 82,000 people, but factories only hired 3,000 new staff. Construction payrolls swelled by 4,000.Services companies took on 82,000 people, but factories only hired 3,000 new staff. Construction payrolls swelled by 4,000.
Overall, the number of unemployed Americans was “little changed” at 5.9 million, says the BLS, adding:Overall, the number of unemployed Americans was “little changed” at 5.9 million, says the BLS, adding:
The unemployment rates for adult men (3.3 percent), adult women (3.2 percent), teenagers (12.7 percent), Whites (3.3 percent), Blacks (6.2 percent), Asians (2.5 percent), and Hispanics (4.2 percent) showed little or no change in May.The unemployment rates for adult men (3.3 percent), adult women (3.2 percent), teenagers (12.7 percent), Whites (3.3 percent), Blacks (6.2 percent), Asians (2.5 percent), and Hispanics (4.2 percent) showed little or no change in May.
Disappointingly, wage growth remains modest. Average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $27.83, or just 0.2% month-on-month. That pulled average wage growth down to 3.1%.Disappointingly, wage growth remains modest. Average hourly earnings for all employees on private nonfarm payrolls increased by 6 cents to $27.83, or just 0.2% month-on-month. That pulled average wage growth down to 3.1%.
Today’s report is the weakest since February, and it suggests America’s economy is losing momentum.Today’s report is the weakest since February, and it suggests America’s economy is losing momentum.
Bloomberg says:Bloomberg says:
U.S. employers last month added the fewest workers in three months and wage gains cooled, suggesting broader economic weakness and likely boosting calls for a Federal Reserve interest-rate cut as President Donald Trump’s trade policies weigh on the economy.U.S. employers last month added the fewest workers in three months and wage gains cooled, suggesting broader economic weakness and likely boosting calls for a Federal Reserve interest-rate cut as President Donald Trump’s trade policies weigh on the economy.
Payrolls rose 75,000 after a downwardly revised 224,000 advance the prior month, according to a Labor Department report Friday that missed all estimates in Bloomberg’s survey calling for 175,000. The jobless rate held at a 49-year low of 3.6% while average hourly earnings climbed 3.1% from a year earlier, less than projected.Payrolls rose 75,000 after a downwardly revised 224,000 advance the prior month, according to a Labor Department report Friday that missed all estimates in Bloomberg’s survey calling for 175,000. The jobless rate held at a 49-year low of 3.6% while average hourly earnings climbed 3.1% from a year earlier, less than projected.
Correct: U.S. adds 75,000 jobs in May, unemployment falls to 3.6%. Wage gains also cooled https://t.co/aLszXzyyjQCorrect: U.S. adds 75,000 jobs in May, unemployment falls to 3.6%. Wage gains also cooled https://t.co/aLszXzyyjQ
Some Wall Street economists may be nervous about their own job security.Some Wall Street economists may be nervous about their own job security.
None of the financial experts who make predictions for a living thought today’s non-farm payroll report would be so weak. Some thought more than 200,000 new jobs would have been created.None of the financial experts who make predictions for a living thought today’s non-farm payroll report would be so weak. Some thought more than 200,000 new jobs would have been created.
NFP vs. Economist Forecasts: (Actual release was below the lowest forecast) pic.twitter.com/NQCY6P8CLcNFP vs. Economist Forecasts: (Actual release was below the lowest forecast) pic.twitter.com/NQCY6P8CLc
This weak jobs report appears to increase the chances that America’s central bank cuts interest rates soon.This weak jobs report appears to increase the chances that America’s central bank cuts interest rates soon.
This is forcing the US dollar down in the international markets.This is forcing the US dollar down in the international markets.
Dollar plummets on weak payrolls number.#USD -0.27% against other currencies#EURUSD 1.13062 +0.27%#GBPUSD 1.27376 +0.34%#USDJPY 108.131 -0.26%#USDCAD 1.33087 -0.4%#AUDUSD 0.69878 +0.15%#USDCHF 0.98888 -0.24%Dollar plummets on weak payrolls number.#USD -0.27% against other currencies#EURUSD 1.13062 +0.27%#GBPUSD 1.27376 +0.34%#USDJPY 108.131 -0.26%#USDCAD 1.33087 -0.4%#AUDUSD 0.69878 +0.15%#USDCHF 0.98888 -0.24%
Traders are also piling into US government debt, driving down the interest rate or yield you get for holding Treasuries. That’s another sign they expect lower interest rates soon.Traders are also piling into US government debt, driving down the interest rate or yield you get for holding Treasuries. That’s another sign they expect lower interest rates soon.
Boom! The US 2-year Treasury #yield falls to 1.81% after disappointing #payrolls. pic.twitter.com/nsaM1AIgWCBoom! The US 2-year Treasury #yield falls to 1.81% after disappointing #payrolls. pic.twitter.com/nsaM1AIgWC
Despite the weak job creation in May, America’s unemployment rate remains at just 3.6%, the lowest level since 1969.Despite the weak job creation in May, America’s unemployment rate remains at just 3.6%, the lowest level since 1969.
But earning growth has slowed to 3.1% compared with a year ago, down from 3.2%. That’s another disappointment.But earning growth has slowed to 3.1% compared with a year ago, down from 3.2%. That’s another disappointment.
More: The jobless rate held at a 49-year low of 3.6% while average hourly earnings climbed 3.1% https://t.co/iC6D12kOy1 pic.twitter.com/4DTO7g1LVjMore: The jobless rate held at a 49-year low of 3.6% while average hourly earnings climbed 3.1% https://t.co/iC6D12kOy1 pic.twitter.com/4DTO7g1LVj
Newsflash: Just 75,000 jobs were created across the US economy last month.Newsflash: Just 75,000 jobs were created across the US economy last month.
That’s much weaker than expected (Wall Street expected the non-farm payroll to rise by 175k ish)That’s much weaker than expected (Wall Street expected the non-farm payroll to rise by 175k ish)
April’s payroll has also been revised down, to show 224,000 new jobs were created, not the 263,000 first reported.April’s payroll has also been revised down, to show 224,000 new jobs were created, not the 263,000 first reported.
More to follow!More to follow!
It’s nearly time for the last major economic news of the week - the US jobs report for May.It’s nearly time for the last major economic news of the week - the US jobs report for May.
Jobs creation is expected to have slowed last month, with the non-farm payroll tipped to increase by around 175,000, from 263,00 in April.Jobs creation is expected to have slowed last month, with the non-farm payroll tipped to increase by around 175,000, from 263,00 in April.
Economists are also hoping that wage growth held steady, and that the jobless rate remained at last month’s 50-year low of just 3.6%.Economists are also hoping that wage growth held steady, and that the jobless rate remained at last month’s 50-year low of just 3.6%.