There’s not much good news around for President Donald Trump. But a 209,000 jobs boost in July is a consolation: US unemployment fell back to 4.3%, a new 16-year low for the world’s most potent economy.
Donald Trump was part-elected on the back of a promise of new jobs (and higher wages). But peer deeper into the Bureau of Labor Statistics numbers and, like the UK’s economy, the concentration of low-paying new service industry jobs pegs the euphoria back. Job growth in higher wage industries like manufacturing, the numbers show, is limited (more below).
The overall tone of the result though saw the spot US dollar price pushed to $93.63 having peaked earlier at $93.75 though this is still a modest uplift given the trashing the greenback has taken. The euro fell almost 1% to $1.1755 while sterling was hit by almost as much, down to $1.3040 at 4pm.
The FTSE 100 ended Friday at 7,511, up 0.49% with Merlin Entertainments the biggest climber, up 5.75%. Housebuilders Barratt and Persimmon fell 4.69% and 4% respectively.
- UK FTSE 100 7,511 +0.49%
- Dow 22,059.21+0.15%
- S&P 500 2,477.01 +0.19%
- Nasdaq 6,352.71 +0.19%
- Nikkei 225 19,952.33 -0.38%
- DAX 12,320.88 +1.35%
- CAC 40 5,216.07 +1.67%
- Gold 1,262.60 -0.93%
- Oil WTI 49.22 +0.41%
More US jobs but lower quality
What the US jobs headline news stubbornly reveals that the labour market, and US economy, still has huge problems – not enough higher paying jobs. “Employment in other major industries, including construction, manufacturing…financial activities, and government, showed little change over the month,” the stats showed.
The overall picture of measured optimism gives the Federal Reserve a bit more cover to raise US interest rates despite low wage growth and low inflation.
VW 'dieselgate' exec charged in US
Staying in the US ex-VW executive Oliver Schmidt, a German national, has pleaded guilty to misleading US authorities and breaking emissions laws. In total Schmidt was charged with more than 10 felony counts. After plea bargaining many of the counts were put aside.
Schmidt was not charged with creating the VW software emissions cheat but he was fingered for being part of the cover-up. Schmidt will be sentenced on 6 December.
He is the second VW exec to plead guilty to US authorities; several other German managers have also been indicted but remain at large, some distance from the US it’s thought.
Rate rise coming – prepare for rude surprise
Finally, more uncertainty for UK home owners. While the Bank of England held off a rate rise yesterday deputy governor Ben Broadbent hinted to the BBC earlier that when a rate rise does come through, it could be chunky.
"The MPC [rate-setting Monetary Policy Committee] said given the other assumptions in its forecast it thought probably there would need to be rate rises, and indeed more rate rises than those priced into the interest rate curve in future than the financial markets expect (our italics).” He added: “I do think the time is likely to come when rates will go up generally."
Breaking news: ASOS is warning about account security concerns. Toyota has taken a 5% share in Mazda. The two look set to build a new US manufacturing plant.