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You can find the current article at its original source at https://www.theguardian.com/business/live/2017/jul/07/markets-shares-bonds-us-jobs-report-uk-trade-data-business-live
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| Version 13 | Version 14 |
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| UK trade deficit swells and industrial output falls, but US creates 222,000 new jobs - as it happened | UK trade deficit swells and industrial output falls, but US creates 222,000 new jobs - as it happened |
| (35 minutes later) | |
| 4.52pm BST | |
| 16:52 | |
| PS: Here’s Katie’s story about today’s weak UK data, and what it means for interest rates.... | |
| 3.08pm BST | 3.08pm BST |
| 15:08 | 15:08 |
| Liam Fox: only politics stands in way of smooth Brexit trade deals | Liam Fox: only politics stands in way of smooth Brexit trade deals |
| Liam Fox, Britain’s international trade secretary, has said there is no reason why the UK can’t replicate the current smooth trading agreements it enjoys with the EU after Brexit, unless politics gets in the way. | Liam Fox, Britain’s international trade secretary, has said there is no reason why the UK can’t replicate the current smooth trading agreements it enjoys with the EU after Brexit, unless politics gets in the way. |
| He told Reuters during a visit to Paris: | He told Reuters during a visit to Paris: |
| We’re going into an arrangement with the EU already with zero tariffs , we’re going there with complete regulatory equivalence and with customs systems that already work. | We’re going into an arrangement with the EU already with zero tariffs , we’re going there with complete regulatory equivalence and with customs systems that already work. |
| The only reason we wouldn’t replicate them would be if politics got in the way of good economics. | The only reason we wouldn’t replicate them would be if politics got in the way of good economics. |
| Fox made the comments a day after the EU’s chief Brexit negotiator, Michel Barnier, said London’s “red lines” for a future trading relationship meant the UK was definitely leaving the single market and customs union, with consequences. | Fox made the comments a day after the EU’s chief Brexit negotiator, Michel Barnier, said London’s “red lines” for a future trading relationship meant the UK was definitely leaving the single market and customs union, with consequences. |
| On that note, we’re closing up for the day. Thank you for all your comments and please join us again on Monday. Have a great weekend. | On that note, we’re closing up for the day. Thank you for all your comments and please join us again on Monday. Have a great weekend. |
| 2.50pm BST | 2.50pm BST |
| 14:50 | 14:50 |
| Wall Street higher after strong payrolls report | Wall Street higher after strong payrolls report |
| US markets are up in early trading, with those strong non-farm payrolls numbers giving investors a boost. | US markets are up in early trading, with those strong non-farm payrolls numbers giving investors a boost. |
| Dow Jones: +0.2% at 21,361 | Dow Jones: +0.2% at 21,361 |
| S&P 500: +0.3% at 2,417 | S&P 500: +0.3% at 2,417 |
| Nasdaq: +0.4% at 5,623 | Nasdaq: +0.4% at 5,623 |
| The FTSE 100 is also edging higher, up 0.1% or seven points at 7,345. Main markets in the rest of Europe are in the red. | The FTSE 100 is also edging higher, up 0.1% or seven points at 7,345. Main markets in the rest of Europe are in the red. |
| 2.44pm BST | 2.44pm BST |
| 14:44 | 14:44 |
| Analysts at Nomura said the stronger-than-expected payrolls number is good for riskier assets. | Analysts at Nomura said the stronger-than-expected payrolls number is good for riskier assets. |
| Equities, EM and high yielders should like it. Higher job creation indicates growth, but weak wages indicates firms are not yet allowing the labour force to reduce margins = higher profitability. | Equities, EM and high yielders should like it. Higher job creation indicates growth, but weak wages indicates firms are not yet allowing the labour force to reduce margins = higher profitability. |
| It shouldn’t bear too much of an impact on the Fed timing of balance sheet reduction as this is an overall good number. | It shouldn’t bear too much of an impact on the Fed timing of balance sheet reduction as this is an overall good number. |
| So it shouldn’t lead to fresh impetus on USD selling in USD/JPY. But given this is good for growth and the ECB normalisation is a far more potent animal at these levels, the markets initial reaction to buy EUR/USD on the dip is something we would agree with. | So it shouldn’t lead to fresh impetus on USD selling in USD/JPY. But given this is good for growth and the ECB normalisation is a far more potent animal at these levels, the markets initial reaction to buy EUR/USD on the dip is something we would agree with. |
| 2.33pm BST | 2.33pm BST |
| 14:33 | 14:33 |
| The US jobs market in graphics: | The US jobs market in graphics: |
| 2.15pm BST | 2.15pm BST |
| 14:15 | 14:15 |
| Paul Ashworth, chief US economist at Capital Economics, says the jobs reports is more evidence that the real economy is in “good health”. | Paul Ashworth, chief US economist at Capital Economics, says the jobs reports is more evidence that the real economy is in “good health”. |
| The only disappointment is that wage growth still shows few signs of accelerating. Average hourly earnings increased by 0.2% m/m in June, but the annual growth rate only edged back up to 2.5%, from 2.4%. That means there has been no pick-up in wage growth whatsoever over the past 18 months. | The only disappointment is that wage growth still shows few signs of accelerating. Average hourly earnings increased by 0.2% m/m in June, but the annual growth rate only edged back up to 2.5%, from 2.4%. That means there has been no pick-up in wage growth whatsoever over the past 18 months. |
| We will find out what Fed Chair Janet Yellen thinks of this next week, during her semi-annual congressional testimony. Our view is that, despite the lack of a pick-up in wage growth and core inflation, the Fed will nevertheless push ahead with hiking interest rates. The unemployment rate is already unusually low and is likely to fall further over the coming months. | We will find out what Fed Chair Janet Yellen thinks of this next week, during her semi-annual congressional testimony. Our view is that, despite the lack of a pick-up in wage growth and core inflation, the Fed will nevertheless push ahead with hiking interest rates. The unemployment rate is already unusually low and is likely to fall further over the coming months. |
| 2.02pm BST | 2.02pm BST |
| 14:02 | 14:02 |
| My colleague Dominic Rushe has the full details on the US jobs report in the context of Donald Trumps big jobs promises. He writes: | My colleague Dominic Rushe has the full details on the US jobs report in the context of Donald Trumps big jobs promises. He writes: |
| The US economy added 222,000 new jobs in June, reversing a worrying slowdown in growth for president Donald Trump who campaigned on a promise of massive job creation. | The US economy added 222,000 new jobs in June, reversing a worrying slowdown in growth for president Donald Trump who campaigned on a promise of massive job creation. |
| Economists had been expecting the US to add around 178,000 over them month but the latest numbers from the bureau of labor statistics comfortably beat those estimates as healthcare and food services showed big monthly gains. | Economists had been expecting the US to add around 178,000 over them month but the latest numbers from the bureau of labor statistics comfortably beat those estimates as healthcare and food services showed big monthly gains. |
| The unemployment rate moved up marginally to 4.4% but remains at lows unseen since 2001. | The unemployment rate moved up marginally to 4.4% but remains at lows unseen since 2001. |
| This month’s numbers came as economists have worried that the US economy is struggling to create large numbers of new jobs despite president Donald Trump’s pledge to create “JOBS! JOBS! JOBS!” | This month’s numbers came as economists have worried that the US economy is struggling to create large numbers of new jobs despite president Donald Trump’s pledge to create “JOBS! JOBS! JOBS!” |
| US employers added just 138,000 jobs in May, the third month of relatively soft growth in the jobs market, and March and April’s figures were revised down by 66,000. | US employers added just 138,000 jobs in May, the third month of relatively soft growth in the jobs market, and March and April’s figures were revised down by 66,000. |
| His full story: | His full story: |
| And here’s the full data from the US labor department: | And here’s the full data from the US labor department: |
| Payroll employment rises by 222,000 in June; unemployment rate changes little at 4.4% https://t.co/NsuHovcqn0 #JobsReport #BLSdata | Payroll employment rises by 222,000 in June; unemployment rate changes little at 4.4% https://t.co/NsuHovcqn0 #JobsReport #BLSdata |
| 1.58pm BST | 1.58pm BST |
| 13:58 | 13:58 |
| Assessing what that non-farm payrolls update means for US interest rates, James Knightley, chief international economist at ING says the report is “good enough” to keep the Federal Reserve on a gradual policy tightening path. | Assessing what that non-farm payrolls update means for US interest rates, James Knightley, chief international economist at ING says the report is “good enough” to keep the Federal Reserve on a gradual policy tightening path. |
| Strong jobs growth should eventually translate into higher wages, but it is taking time to do so. The Fed remains confident it will come, suggesting gradual hikes will continue, but the market continues to have doubts. | Strong jobs growth should eventually translate into higher wages, but it is taking time to do so. The Fed remains confident it will come, suggesting gradual hikes will continue, but the market continues to have doubts. |
| ...In any case, the Fed has repeatedly used the term “transitory” to describe the slowdown in activity and subdued inflation backdrop and believe that it is only a matter of time before the tightness in the labour market translates into rising wage pressures. We agree. | ...In any case, the Fed has repeatedly used the term “transitory” to describe the slowdown in activity and subdued inflation backdrop and believe that it is only a matter of time before the tightness in the labour market translates into rising wage pressures. We agree. |
| 1.51pm BST | 1.51pm BST |
| 13:51 | 13:51 |
| Some market reaction now to that news of stronger-than-expected growth in jobs but weaker-than-forecast wage growth in the US last month. | Some market reaction now to that news of stronger-than-expected growth in jobs but weaker-than-forecast wage growth in the US last month. |
| US stock futures have extended gains but the dollar has lost ground as traders focus on the wage growth undershoot - something that will temper expectations of further rate rises from the US Federal Reserve this year. | US stock futures have extended gains but the dollar has lost ground as traders focus on the wage growth undershoot - something that will temper expectations of further rate rises from the US Federal Reserve this year. |
| Disappointing US #wage growth is the key takeaway. Doesn't help the #Fed's quest to convince markets dip in inflation is "transitory" #NFP pic.twitter.com/py4BmuR2d0 | Disappointing US #wage growth is the key takeaway. Doesn't help the #Fed's quest to convince markets dip in inflation is "transitory" #NFP pic.twitter.com/py4BmuR2d0 |
| Impressive 222K jobs number, but disappointing wage growth not budging from 2.5% 12-month change is more important. | Impressive 222K jobs number, but disappointing wage growth not budging from 2.5% 12-month change is more important. |
| Elsewhere, there are some interesting patterns in where the new jobs are coming from in President Donald Trump’s America. (Of course, his pledges to revive manufacturing were always going to take time to show in the jobs numbers but it shows the challenge ahead) | Elsewhere, there are some interesting patterns in where the new jobs are coming from in President Donald Trump’s America. (Of course, his pledges to revive manufacturing were always going to take time to show in the jobs numbers but it shows the challenge ahead) |
| Job growth is strong but sectoral shifts are clear:59.1K jobs added in health care and social assistance1K jobs added in manufacturing. | Job growth is strong but sectoral shifts are clear:59.1K jobs added in health care and social assistance1K jobs added in manufacturing. |
| 1.34pm BST | 1.34pm BST |
| 13:34 | 13:34 |
| More details now on that US jobs report: | More details now on that US jobs report: |
| More jobs were added than expected but wage growth missed forecasts. The report from the Labor Department shows average earnings rose by 0.2% month-on-month in June, and were up 2.5% over the last year. Forecasts were for average hourly earnings to increase 0.3% in June and for the year-on-year growth rate to stand at 2.7%. | More jobs were added than expected but wage growth missed forecasts. The report from the Labor Department shows average earnings rose by 0.2% month-on-month in June, and were up 2.5% over the last year. Forecasts were for average hourly earnings to increase 0.3% in June and for the year-on-year growth rate to stand at 2.7%. |
| The Labor Department said the unemployment rate was 4.4%. Economists had forecast it would hold at a 16-year low of 4.3%. | The Labor Department said the unemployment rate was 4.4%. Economists had forecast it would hold at a 16-year low of 4.3%. |
| 1.31pm BST | 1.31pm BST |
| 13:31 | 13:31 |
| US jobs report beats forecasts with payrolls up 222,000 in June | US jobs report beats forecasts with payrolls up 222,000 in June |
| BREAKING: The US economy added 222,000 jobs in June, according to the latest non-farm payrolls report. | BREAKING: The US economy added 222,000 jobs in June, according to the latest non-farm payrolls report. |
| That was higher than the 179,000 forecast by economists in a Reuters poll. | That was higher than the 179,000 forecast by economists in a Reuters poll. |
| May’s gain was revised to 152,000 from the 138,000 figure previously reported. | May’s gain was revised to 152,000 from the 138,000 figure previously reported. |
| More to follow... | More to follow... |
| 1.05pm BST | 1.05pm BST |
| 13:05 | 13:05 |
| Newsflash: The NIESR thinktank has estimated that Britain’s economy only grew by 0.3% in the second quarter of this year. | Newsflash: The NIESR thinktank has estimated that Britain’s economy only grew by 0.3% in the second quarter of this year. |
| That would be an improvement on the 0.2% growth recorded in January-March, but below the 0.6% trend growth rate. | That would be an improvement on the 0.2% growth recorded in January-March, but below the 0.6% trend growth rate. |
| Rebecca Piggott, Research Fellow at NIESR, says: | Rebecca Piggott, Research Fellow at NIESR, says: |
| Growth in services has offset a contraction in industrial output, yet remains subdued when compared with last year. | Growth in services has offset a contraction in industrial output, yet remains subdued when compared with last year. |
| The saving ratio reached an historic low of 1.7 per cent in the first quarter of this year, implying that, so far, households have reduced their saving to cushion the effect of falling real incomes on consumption as inflation rises”. | The saving ratio reached an historic low of 1.7 per cent in the first quarter of this year, implying that, so far, households have reduced their saving to cushion the effect of falling real incomes on consumption as inflation rises”. |
| Our monthly estimates of GDP suggest that output grew by 0.3% in 2017Q2https://t.co/7Mrev3gkzd#NIESRGDP pic.twitter.com/vYbIFpOZ4d | Our monthly estimates of GDP suggest that output grew by 0.3% in 2017Q2https://t.co/7Mrev3gkzd#NIESRGDP pic.twitter.com/vYbIFpOZ4d |
| 12.34pm BST | 12.34pm BST |
| 12:34 | 12:34 |
| Philip Coggan of the Economist points out that the drop in the pound after the EU referendum hasn’t helped the trade gap: | Philip Coggan of the Economist points out that the drop in the pound after the EU referendum hasn’t helped the trade gap: |
| Ave UK trade deficit in Jan-May 2016 (pre-referendum) £2,801m; ave in Jan-May 2017 £2,806m. Living standards squeezed but no boost to trade | Ave UK trade deficit in Jan-May 2016 (pre-referendum) £2,801m; ave in Jan-May 2017 £2,806m. Living standards squeezed but no boost to trade |
| 12.03pm BST | 12.03pm BST |
| 12:03 | 12:03 |
| The key charts | The key charts |
| If you’re just tuning in, here are some charts that show today’s data. | If you’re just tuning in, here are some charts that show today’s data. |
| First, the widening of the UK trade gap to £3.1bn, from £2bn, as a jump in imports drove the ‘trade in goods’ deficit to over £11bn: | First, the widening of the UK trade gap to £3.1bn, from £2bn, as a jump in imports drove the ‘trade in goods’ deficit to over £11bn: |
| Second, the disappointing 0.1% drop in UK industrial output in May. | Second, the disappointing 0.1% drop in UK industrial output in May. |
| 11.20am BST | 11.20am BST |
| 11:20 | 11:20 |
| Sustained selling pressure has just pushed the pound down through $1.29, a drop of 0.7 of a cent today. | Sustained selling pressure has just pushed the pound down through $1.29, a drop of 0.7 of a cent today. |
| Bloomberg explains: | Bloomberg explains: |
| The pound fell for the first time in three days versus the dollar after data showed U.K. factories and construction companies’ output unexpectedly declined in May, adding to a spate of recent data that pointed to an economic slowdown. | The pound fell for the first time in three days versus the dollar after data showed U.K. factories and construction companies’ output unexpectedly declined in May, adding to a spate of recent data that pointed to an economic slowdown. |
| Sterling was on course for weekly declines against all but two of its Group-of-10 peers, as manufacturing, industrial and construction output all dropped and undercut analysts’ forecasts. | Sterling was on course for weekly declines against all but two of its Group-of-10 peers, as manufacturing, industrial and construction output all dropped and undercut analysts’ forecasts. |
| Pound falls for first time in 3 days against dollar as fears grow of an economic slowdown https://t.co/t22JoRr4qe pic.twitter.com/IT8bZwLeL8 | Pound falls for first time in 3 days against dollar as fears grow of an economic slowdown https://t.co/t22JoRr4qe pic.twitter.com/IT8bZwLeL8 |
| Updated | Updated |
| at 11.27am BST | at 11.27am BST |
| 11.14am BST | 11.14am BST |
| 11:14 | 11:14 |
| This morning’s data paint a rather bleak picture for the UK economy and underline the challenges lying ahead, says Kay Daniel Neufeld of the CEBR. | This morning’s data paint a rather bleak picture for the UK economy and underline the challenges lying ahead, says Kay Daniel Neufeld of the CEBR. |
| He fears that growth is going to be subdued this year, and next: | He fears that growth is going to be subdued this year, and next: |
| So far, the depreciation in Sterling has not led to a significant reduction in the trade deficit – at Cebr we have repeatedly stressed that the UK’s high-value added exports are less price sensitive and that any rebalancing in the make-up of exports will take time to manifest itself. | So far, the depreciation in Sterling has not led to a significant reduction in the trade deficit – at Cebr we have repeatedly stressed that the UK’s high-value added exports are less price sensitive and that any rebalancing in the make-up of exports will take time to manifest itself. |
| In the meantime the lack of clarity about future trading relationship with the EU – further exacerbated by the result of the general election – weighs on activity in the manufacturing sector. | In the meantime the lack of clarity about future trading relationship with the EU – further exacerbated by the result of the general election – weighs on activity in the manufacturing sector. |
| As a result, Cebr expects GDP growth of only 1.3% in 2017 and 1.2% in 2018. | As a result, Cebr expects GDP growth of only 1.3% in 2017 and 1.2% in 2018. |