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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
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US economy stumbles by creating just 75,000 jobs in May - business live | |
(32 minutes later) | |
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/vS7jM9LMYy | |
Josie Dent, senior economist at the CEBR thinktank, also spies a US interest rate cut on the horizon..... | |
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. | |
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. | |
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. | |
Anthony 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. | |
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/xulYL6wFqx | |
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. | |
“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. | |
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/aLszXzyyjQ | Correct: 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/NQCY6P8CLc | NFP 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/nsaM1AIgWC | Boom! 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/4DTO7g1LVj | 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/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%. |