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| US economy created 227,000 new jobs in January, as jobless rate rises to 4.8% - live updates | US economy created 227,000 new jobs in January, as jobless rate rises to 4.8% - live updates |
| (35 minutes later) | |
| 3.25pm GMT | |
| 15:25 | |
| President Trump is meeting with business leaders and it appears the plans for the financial sector are on the agenda: | |
| US Pres. Trump: To Discuss Dodd-Frank, Banking Industry With Business Council Members - RTRS | |
| 3.13pm GMT | |
| 15:13 | |
| Unlike the Markit survey, another report on the services sector has come in below expectations, although still showing a strong performance. | |
| The ISM non-manufactuing PMI was 56.5 in January, virtually flat on the 56.6 recorded the previous month and slightly below expectations of a figure of 57. | |
| Meanwhile factory orders in December rose by 1.3% compared to estimates of a 1% increase, and a 2.3% fall in November. | |
| Updated | |
| at 3.13pm GMT | |
| 3.07pm GMT | |
| 15:07 | |
| Back with the Dow, and it is clear that the financial sector is on the rise thanks to the idea that Donald Trump will row back on regulation: | |
| 2.53pm GMT | 2.53pm GMT |
| 14:53 | 14:53 |
| US service sector beats expectations | US service sector beats expectations |
| The first of two surveys of the US service sector has shown a better than expected performance last month. | The first of two surveys of the US service sector has shown a better than expected performance last month. |
| The Markit service sector PMI for January came in at 55.6 compared to an initial estimate of 55.1 and December’s figure of 53.9. This was the highest reading since November 2015. | The Markit service sector PMI for January came in at 55.6 compared to an initial estimate of 55.1 and December’s figure of 53.9. This was the highest reading since November 2015. |
| The Markit Composite index, which includes services and manufacturing, was 55.8, up from 54.1 in December. Chris Williamson, chief business economist at IHS Markit said: | The Markit Composite index, which includes services and manufacturing, was 55.8, up from 54.1 in December. Chris Williamson, chief business economist at IHS Markit said: |
| The US economy has started 2017 on the front foot. Business activity across the economy is growing at the fastest rate for over a year and optimism about the business outlook has risen to the highest for a year and a half. | The US economy has started 2017 on the front foot. Business activity across the economy is growing at the fastest rate for over a year and optimism about the business outlook has risen to the highest for a year and a half. |
| The January surveys signal annualized GDP growth of approximately 2.5%, setting the scene for a solid first quarter. With January seeing the largest inflow of new business for 18 months, there’s good reason to believe that firms will be even busier in coming months. | The January surveys signal annualized GDP growth of approximately 2.5%, setting the scene for a solid first quarter. With January seeing the largest inflow of new business for 18 months, there’s good reason to believe that firms will be even busier in coming months. |
| Even more encouraging is the ongoing impressive rate of job creation, with the January PMI numbers comparable to around 200,000 jobs being added. | Even more encouraging is the ongoing impressive rate of job creation, with the January PMI numbers comparable to around 200,000 jobs being added. |
| A waning of price pressures takes some heat off the Fed, though the sustained strong output and jobs growth signalled by the surveys will fuel speculation that the next rate hike will be sooner rather than later, with June looking most likely. | A waning of price pressures takes some heat off the Fed, though the sustained strong output and jobs growth signalled by the surveys will fuel speculation that the next rate hike will be sooner rather than later, with June looking most likely. |
| 2.44pm GMT | 2.44pm GMT |
| 14:44 | 14:44 |
| Wall Street opens higher | Wall Street opens higher |
| US markers are on the rise after the better than expected headline jobs figure, with financial companies also benefitting from the prospect of looser regulation if Donald Trump scraps the Dodd-Frank legislation. | US markers are on the rise after the better than expected headline jobs figure, with financial companies also benefitting from the prospect of looser regulation if Donald Trump scraps the Dodd-Frank legislation. |
| The Dow Jones Industrial Average is currently up 96 points or 0.48% while the S&P 500 opened 0.4% higher and the Nasdaq Composite 0.26% better. | The Dow Jones Industrial Average is currently up 96 points or 0.48% while the S&P 500 opened 0.4% higher and the Nasdaq Composite 0.26% better. |
| Updated | Updated |
| at 2.45pm GMT | at 2.45pm GMT |
| 2.15pm GMT | 2.15pm GMT |
| 14:15 | 14:15 |
| The mixed picture from the non-farm figures - positive jobs numbers, weaker than expected wages growth - also saw some volatility in the currency markets as traders tried to work out the implications for US interest rates. Kathleen Brooks, research director at City Index, said: | The mixed picture from the non-farm figures - positive jobs numbers, weaker than expected wages growth - also saw some volatility in the currency markets as traders tried to work out the implications for US interest rates. Kathleen Brooks, research director at City Index, said: |
| The dollar initially reacted positively, however, within minutes the dollar index backed off highs as the foreign exchange market took stock of some of the weaker elements of the report. US stock market futures moved higher and are predicting a stronger open for the Dow, S&P and Nasdaq. However, the bond market was less impressed, and US treasury yields fell across the curve, the two-year yield is currently down 5 basis points, which could weigh on the buck further on Friday. | The dollar initially reacted positively, however, within minutes the dollar index backed off highs as the foreign exchange market took stock of some of the weaker elements of the report. US stock market futures moved higher and are predicting a stronger open for the Dow, S&P and Nasdaq. However, the bond market was less impressed, and US treasury yields fell across the curve, the two-year yield is currently down 5 basis points, which could weigh on the buck further on Friday. |
| We don’t think that today’s non-farm payrolls report, on its own, will be a game changer for the Fed, and the market is still pricing in the prospect of another rate hike from the Fed by mid-year; after all wage growth at 2.5% is still above the Fed’s target inflation rate. However, we will be watching the development of wages, which are a key metric for the Federal Reserve going forward. If they don’t pick up again for February then Federal Reserve rate hike expectations may start to get pushed further out to the second half of 2017, which could limit dollar upside in the medium term. | We don’t think that today’s non-farm payrolls report, on its own, will be a game changer for the Fed, and the market is still pricing in the prospect of another rate hike from the Fed by mid-year; after all wage growth at 2.5% is still above the Fed’s target inflation rate. However, we will be watching the development of wages, which are a key metric for the Federal Reserve going forward. If they don’t pick up again for February then Federal Reserve rate hike expectations may start to get pushed further out to the second half of 2017, which could limit dollar upside in the medium term. |
| 2.14pm GMT | 2.14pm GMT |
| 14:14 | 14:14 |
| The yield, or interest rate, on US government bonds has fallen since the jobs report came out. | The yield, or interest rate, on US government bonds has fallen since the jobs report came out. |
| Traders are betting that the weak wage growth last month means the Fed is even less likely to raise interest rates in March. | Traders are betting that the weak wage growth last month means the Fed is even less likely to raise interest rates in March. |
| Expectations for March Fed hike drop to 12%, from 20%.(via @pattidomm) @CNBC | Expectations for March Fed hike drop to 12%, from 20%.(via @pattidomm) @CNBC |
| Free headline: Trump Trade Trounced pic.twitter.com/4ykYwBJXsz | Free headline: Trump Trade Trounced pic.twitter.com/4ykYwBJXsz |
| 2.09pm GMT | 2.09pm GMT |
| 14:09 | 14:09 |
| US jobs report: What the experts say | US jobs report: What the experts say |
| Wall Street and City economists broadly agree that today’s US jobs report shows America’s economy remains robust, although the mediocre wage growth is a disappointment. | Wall Street and City economists broadly agree that today’s US jobs report shows America’s economy remains robust, although the mediocre wage growth is a disappointment. |
| Andrew Hunter of Capital Economics: | Andrew Hunter of Capital Economics: |
| The 227,000 rise in non-farm payrolls in January suggests that the labour market started the year on a reasonably solid footing. However, the drop back in annual wage growth is another reason to think the Fed will hold off raising interest rates until June. | The 227,000 rise in non-farm payrolls in January suggests that the labour market started the year on a reasonably solid footing. However, the drop back in annual wage growth is another reason to think the Fed will hold off raising interest rates until June. |
| Kully Samra, Charles Schwab U.K. Managing Director: | Kully Samra, Charles Schwab U.K. Managing Director: |
| “Today’s jobs numbers coupled with most other economic data points this week demonstrate the ongoing resilience and strength of the US economy. | “Today’s jobs numbers coupled with most other economic data points this week demonstrate the ongoing resilience and strength of the US economy. |
| The figures also corroborate the findings of the Atlanta Fed Wage Growth Tracker, which has generally continued on an upward trend over the last quarter. This is a further indicator of both momentum in the wider domestic economy and that a tighter job market is boosting job security and overall pay. | The figures also corroborate the findings of the Atlanta Fed Wage Growth Tracker, which has generally continued on an upward trend over the last quarter. This is a further indicator of both momentum in the wider domestic economy and that a tighter job market is boosting job security and overall pay. |
| “Weekly jobless claims remain near a multi-decade low and appear healthy enough to keep the low unemployment rate intact. A strong job market, inflection points in the wider economic data and corporate earnings, alongside increased consumer and business confidence, should be a cause for optimism amongst investors in US equities.” | “Weekly jobless claims remain near a multi-decade low and appear healthy enough to keep the low unemployment rate intact. A strong job market, inflection points in the wider economic data and corporate earnings, alongside increased consumer and business confidence, should be a cause for optimism amongst investors in US equities.” |
| Naeem Aslam of Think Markets: | Naeem Aslam of Think Markets: |
| The US NFP data has confirmed that the lavish party in the employment sector is still somewhat solid, especially if you look at the headline number. You can say that it was a super solid number because it was well ahead of expectations. This week we had a number disappointing news with respect to what traders were expecting, for instance, the Bank of England’s event. | The US NFP data has confirmed that the lavish party in the employment sector is still somewhat solid, especially if you look at the headline number. You can say that it was a super solid number because it was well ahead of expectations. This week we had a number disappointing news with respect to what traders were expecting, for instance, the Bank of England’s event. |
| It is not all good news when it comes to the US jobs number because if you peel the layers, it shows that the downside surprise is in the wage report and a lot of disappointment there. We still need to see more readings before we can see that there is a trend because this number is full with noise. | It is not all good news when it comes to the US jobs number because if you peel the layers, it shows that the downside surprise is in the wage report and a lot of disappointment there. We still need to see more readings before we can see that there is a trend because this number is full with noise. |
| There is no doubt that the hourly wage growth has gathered the most momentum recently and fuelled this concern among traders that the Fed is behind the curve, while inflation is picking up steam. Clearly, today’s number has put cold water on that. Moreover, if you are interested in a rate hike, then clearly you need to know that the Fed cannot move until they have a clear idea what the fiscal spending will be and that is the reality which market needs to digest. | There is no doubt that the hourly wage growth has gathered the most momentum recently and fuelled this concern among traders that the Fed is behind the curve, while inflation is picking up steam. Clearly, today’s number has put cold water on that. Moreover, if you are interested in a rate hike, then clearly you need to know that the Fed cannot move until they have a clear idea what the fiscal spending will be and that is the reality which market needs to digest. |
| Justin Wolfers of University of Michigan. | Justin Wolfers of University of Michigan. |
| Bottom line: Jobs numbers confirm the US economy is still motoring along nicely at a good clip—fast enough to keep pushing unemployment down | Bottom line: Jobs numbers confirm the US economy is still motoring along nicely at a good clip—fast enough to keep pushing unemployment down |
| The big question remains how much slack remains in the labor market, and how many folks we can pull back into the labor force. | The big question remains how much slack remains in the labor market, and how many folks we can pull back into the labor force. |
| Tanweer Akram of Thrivent | Tanweer Akram of Thrivent |
| Continued improvement in the labor market in the U.S. strengthens the case of the Fed remaining on course to gradually tighten monetary policy in the coming months. Even though last month’s job growth was strong, the FOMC will be cautious in tightening monetary policy because of considerable uncertainty about economic policy and global conditions. | Continued improvement in the labor market in the U.S. strengthens the case of the Fed remaining on course to gradually tighten monetary policy in the coming months. Even though last month’s job growth was strong, the FOMC will be cautious in tightening monetary policy because of considerable uncertainty about economic policy and global conditions. |
| A key challenge for the new administration will be to lift growth in both workers’ compensation and labor productivity. Infrastructure spending, lower taxes, business friendly attitude, and more streamlined regulations would be beneficial to the economy. However, higher tariffs, restrictive immigration policies, protectionism, lack of action on global climate change, and various erratic policies would be harmful. | A key challenge for the new administration will be to lift growth in both workers’ compensation and labor productivity. Infrastructure spending, lower taxes, business friendly attitude, and more streamlined regulations would be beneficial to the economy. However, higher tariffs, restrictive immigration policies, protectionism, lack of action on global climate change, and various erratic policies would be harmful. |
| Richard de Meo, Managing Director of Foenix Partners. | Richard de Meo, Managing Director of Foenix Partners. |
| Today’s Non Farms print was as strong as last month’s was disappointing, yet the reflex dollar rally was quickly given back as traders cast their eyes through the detail of an underwhelming overall jobs report. | Today’s Non Farms print was as strong as last month’s was disappointing, yet the reflex dollar rally was quickly given back as traders cast their eyes through the detail of an underwhelming overall jobs report. |
| Seasonal challenges relating to January data should be taken into account, yet the fall in average earnings to 0.1% and a rise in the unemployment rate to 4.8% might cause a slight stir across the FOMC, who just this week expressed their comfort with the labour sector. A binary assessment of upcoming Fed decisions would point to a minimal but negative impact to rate expectations, yet the stronger message to emerge is that US businesses confidence is on the rise and, in the process, already helping Trump towards his 4% GDP target. | Seasonal challenges relating to January data should be taken into account, yet the fall in average earnings to 0.1% and a rise in the unemployment rate to 4.8% might cause a slight stir across the FOMC, who just this week expressed their comfort with the labour sector. A binary assessment of upcoming Fed decisions would point to a minimal but negative impact to rate expectations, yet the stronger message to emerge is that US businesses confidence is on the rise and, in the process, already helping Trump towards his 4% GDP target. |
| 2.06pm GMT | 2.06pm GMT |
| 14:06 | 14:06 |
| I’ve grabbed some nice charts off Bloomberg TV, showing how today’s jobs report compared to Wall Street’s forecasts.... | I’ve grabbed some nice charts off Bloomberg TV, showing how today’s jobs report compared to Wall Street’s forecasts.... |
| ...and also showing how wage growth dipped: | ...and also showing how wage growth dipped: |
| 1.50pm GMT | 1.50pm GMT |
| 13:50 | 13:50 |
| Here’s our US business editor, Dominic Rushe, on today’s jobs report: | Here’s our US business editor, Dominic Rushe, on today’s jobs report: |
| The US added 227,000 new jobs in January, the last month of the Obama presidency and the first of Donald Trump’s, the Department of Labor announced on Friday. | The US added 227,000 new jobs in January, the last month of the Obama presidency and the first of Donald Trump’s, the Department of Labor announced on Friday. |
| The closely watched figure was the best since last June and comes after Trump won the election promising jobs growth and pushing US companies to employ American citizens, threatening to tax imports of goods made outside US borders. | The closely watched figure was the best since last June and comes after Trump won the election promising jobs growth and pushing US companies to employ American citizens, threatening to tax imports of goods made outside US borders. |
| However, the report also highlights the struggle ahead for Trump and underlines Obama’s record on job creation. January marked the 76th consecutive month of job gains, the best on record. And the unemployment rate, at 4.8%, is in line with the Federal Reserve’s estimate for a normal job market. | However, the report also highlights the struggle ahead for Trump and underlines Obama’s record on job creation. January marked the 76th consecutive month of job gains, the best on record. And the unemployment rate, at 4.8%, is in line with the Federal Reserve’s estimate for a normal job market. |
| Trump was a harsh critic of the government’s monthly job’s report during the election campaign. He claimed that 5% unemployment was “one of the biggest hoaxes in modern politics.” In August 2015, Trump told Time magazine that the real unemployment rate was 42%, at the time the Labor Department reading was 5.1%. | Trump was a harsh critic of the government’s monthly job’s report during the election campaign. He claimed that 5% unemployment was “one of the biggest hoaxes in modern politics.” In August 2015, Trump told Time magazine that the real unemployment rate was 42%, at the time the Labor Department reading was 5.1%. |
| Here’s the full story: | Here’s the full story: |
| 1.48pm GMT | 1.48pm GMT |
| 13:48 | 13:48 |
| Another reason to be worried about US earnings: | Another reason to be worried about US earnings: |
| "Over the year, average hourly earnings rose by 2.5% in January, compared with 2.9% year over year last month." - @WSJecon | "Over the year, average hourly earnings rose by 2.5% in January, compared with 2.9% year over year last month." - @WSJecon |
| 1.48pm GMT | 1.48pm GMT |
| 13:48 | 13:48 |
| Here’s some instant reaction, first from bond trading magnate Bill Gross: | Here’s some instant reaction, first from bond trading magnate Bill Gross: |
| "I suppose it's good for corp, profits", says Gross @BloombergRadio. But ultimately it's the consumer drives the economy. YoY wage revision | "I suppose it's good for corp, profits", says Gross @BloombergRadio. But ultimately it's the consumer drives the economy. YoY wage revision |
| This is from James Pethokoukis of the American Enterprise Institute: | This is from James Pethokoukis of the American Enterprise Institute: |
| So strongish January jobs report, 227,000 jobs. Labor participation, emp-pop both up 0.2 - though an * b/c of population adjustment | So strongish January jobs report, 227,000 jobs. Labor participation, emp-pop both up 0.2 - though an * b/c of population adjustment |
| Bloomberg’s Joe Weisenthal suggests there’s little pressure on the US central bank to hike rates fast. | Bloomberg’s Joe Weisenthal suggests there’s little pressure on the US central bank to hike rates fast. |
| Key thing about this report is modest wage growth and jump in LFPR suggest no reason for the Fed to accelerate its hike schedule. | Key thing about this report is modest wage growth and jump in LFPR suggest no reason for the Fed to accelerate its hike schedule. |
| Economist Shaun Richards points out that wage growth is still modest, even though the US economy is creating more jobs. | Economist Shaun Richards points out that wage growth is still modest, even though the US economy is creating more jobs. |
| The theme of employment growth with wage growth underperforming just repeats and repeats in the credit crunch era doesn't it? #NFP | The theme of employment growth with wage growth underperforming just repeats and repeats in the credit crunch era doesn't it? #NFP |
| 1.43pm GMT | 1.43pm GMT |
| 13:43 | 13:43 |
| America’s labour force participation rate, which measures everyone working or available for work, has risen to 62.9% from 62.7%. | America’s labour force participation rate, which measures everyone working or available for work, has risen to 62.9% from 62.7%. |
| That implies that some economically inactive people started looking for work again last month (and is one reason the jobless rate rose to 4.8%). | That implies that some economically inactive people started looking for work again last month (and is one reason the jobless rate rose to 4.8%). |
| Labor Force Participation Rate rises from 62.7% to 62.9% pic.twitter.com/yae7COyB1q | Labor Force Participation Rate rises from 62.7% to 62.9% pic.twitter.com/yae7COyB1q |
| 1.41pm GMT | 1.41pm GMT |
| 13:41 | 13:41 |
| The number of Americans who would like to work more hours went up last month. | The number of Americans who would like to work more hours went up last month. |
| The U6 rate, which measure unemployment and underemployment, has risen to 9.4% from 9.2%. | The U6 rate, which measure unemployment and underemployment, has risen to 9.4% from 9.2%. |
| U3 Unemployment Rate 4.8% vs 4.7% exp/prev.U6 UER 9.4% vs 9.2% prev.Avg Hourly Earnings +2.5% YoY vs 2.7% exp/2.9% prev. | U3 Unemployment Rate 4.8% vs 4.7% exp/prev.U6 UER 9.4% vs 9.2% prev.Avg Hourly Earnings +2.5% YoY vs 2.7% exp/2.9% prev. |
| 1.35pm GMT | 1.35pm GMT |
| 13:35 | 13:35 |
| November’s jobs report has been revised, to show that only 164,000 new jobs were created, not 204,000 as first thought. | November’s jobs report has been revised, to show that only 164,000 new jobs were created, not 204,000 as first thought. |
| December’s data has been revised up by 1,000, to 157,000. | December’s data has been revised up by 1,000, to 157,000. |
| 1.34pm GMT | 1.34pm GMT |
| 13:34 | 13:34 |
| The wages figure is a disappointment! | The wages figure is a disappointment! |
| Average earnings only rose by 0.1% month-on-month in January, dashing hopes of a 0.3% gain. | Average earnings only rose by 0.1% month-on-month in January, dashing hopes of a 0.3% gain. |
| Average hour earnings up 0.1% in January vs. 0.3% expectations. YOY wages up 2.5% #JobsReport https://t.co/DClcu4FCnl | Average hour earnings up 0.1% in January vs. 0.3% expectations. YOY wages up 2.5% #JobsReport https://t.co/DClcu4FCnl |
| 1.33pm GMT | 1.33pm GMT |
| 13:33 | 13:33 |
| America’s jobless rate has risen to 4.8%, from 4.7% in December. | America’s jobless rate has risen to 4.8%, from 4.7% in December. |