US employment falls for first time in seven years amid hurricane destruction - as it happened

Non-farm payrolls fell by 33,000 last month as Hurricanes Harvey and Irma triggered a record drop in employment in the hospitality and leisure sectors

• Halifax report: UK houses prices grow at fastest rate in eight months
• Pound hits four-week low against dollar as Tory infighting builds
• UK productivity falls in the second quarter and lags G7 average

5.09pm BST

A stronger euro left European markets flagging, not helped by the continuing concerns about the stand-off between the Spanish government and Catalonia's independence promoters. But with the pound suffering amid the latest political uncertainties in the wake of the Tory party conference, the FTSE 100 managed to edge higher by the end of trading, with its overseas earners benefitting from the prospect of a weaker sterling.

A mixed bag for the US, with an unexpected fall in jobs balanced by a rise in wage growth, left Wall Street slipping back from record highs. The final scores in Europe showed:

4.17pm BST

A mixture of profit taking and concerns about oversupply have brought a rally in the oil price to an abrupt end.

Hopes that producers would extend their agreement to cap output and reduce a supply glut have supported crude prices recently. But they have slipped back after Russia clarified that President Putin had not, as suggested, proposed extending the production cut agreement although he thought it was a possibility. Saudi Arabia's energy minister also sounded lukewarm about an extension until the end of 2018, saying he was "flexible" about it.

3.35pm BST

The pound continues to flounder against the dollar, both on worries about the political situation in the UK and of course, the strength of the US currency as the likelihood of a Federal Reserve interest rate rise in December increases. At the moment the pound is down 0.53% at $1.3047, albeit off its worst levels. Connor Campbell. financial analyst at Spreadex, said:

Friday's US non-farm jobs report only made the week worse for cable, despite a rather unpleasant headline figure.

The non-farm number itself was as ugly as they come. For the first time in 7 years the reading came in negative, at -33k against the 82k forecast and the (upwards revised) 169k seen in August. Yet while the figure was far worse than expected, it actually wasn't that surprising given it covered a period impacted by Hurricanes Irma and Harvey.

3.23pm BST

Probability of a December Rate Hike

October 6: 80%
September 8: 19%

*interest rate futures: Fed speak and wage pressure going the trick

3.09pm BST

Here's our report on the US jobs data. Dominic Rushe writes:

The US jobs market stalled in September, losing 33,000 jobs, as Hurricanes Harvey and Irma took their toll. It was the first time in seven years that the US monthly total had recorded a fall.

The US economy had added an average of 176,000 new jobs a month so far this year but as the labor department had predicted the storms, which caused fatal and catastrophic damage across Texas and Florida, slowed hiring.

Related: US loses jobs for first time in seven years as hurricanes buffet market

2.50pm BST

Broader market down a bit this morning but bank stocks up. $XLF Translation? Investors still bet on December rate hike despite jobs report.

2.45pm BST

After their recent record breaking runs, US markets have paused for breath.

Despite the weaker headline jobs figure, the dollar has strengthened on the basis that higher than expected wages growth means the Federal Reserve may well raise interest rates before the end of the year. In turn, that has put a small dampener on equities.

2.35pm BST

And here's a link to the jobs report data:

More charts and analysis on the September nonfarm payroll employment numbers https://t.co/g1NChl6Lxc #JobsReport #BLSdata

2.33pm BST

If you doubt whether #NFP was distorted by hurricanes, just look at the number unable to work due to weather in h'hold survey. pic.twitter.com/jCmCr5jWx5

2.25pm BST

The dollar has moved higher following the US jobs data, despite a fall in the headline figure. Analysts point to the strong pay growth giving the Federal Reserve leeway to raise rates in December.

So sterling has hit a four week low against the dollar, while the US currency was at its strongest level against the euro since mid-August. Against the yen, the greenback hit its highest since mid-July. James Knightley, chief international economist at ING Bank, said:

Hurricane disruption dragged payrolls negative, but a big fall in unemployment and significant wage increases make a December rate hike look probable...

Despite the softness in payrolls the unemployment rate fell to 4.2% from 4.4%. The other big number is the 0.5% month on month jump in wages - the biggest increase since November 2008 - which takes the annual wage growth number up to 2.9%. Note that there were also some upward revisions to monthly wage rates so we may finally be seeing some of the strength in jobs feeding through into inflation pressures.

Headline job creation had a rough time in September. Although a significant slowdown was expected after the summer's tropical storms, not many forecasts were expecting to see a contraction. The most important surprise, however, comes from a significant increase in wage growth and a new drop in the unemployment rate to fresh 16-year lows.

Wage growth has been the last piece of the inflation puzzle for the Federal Reserve over the last several quarters, as it remained stubbornly low despite a strong economic recovery and continued new lows in the unemployment rate. Albeit late, wage growth finally made an appearance in September with a massive increase well above expectations. Despite the contraction in employment, the three-month average of headline job creation remains above 100.000 jobs/month, which will not discourage the Fed from a hike.

2.17pm BST

Here is a chart showing clearly the impact on leisure and hospitality jobs:

2.11pm BST

Other key figures from the non-farms report show the overall jobless rate fell unexpectedly to 4.2% from 4.4%.

Pay growth was also better-than-expected, picking up to 0.5% in September from 0.2% in August. Economists were predicting a smaller rise to 0.3%.

2.04pm BST

The impact on jobs of Hurricanes Harvey and Irma was far greater than economists had predicted in September.

The 33,000 fall in non-farm payrolls was the first drop in seven years after workers were displaced and firms delayed hiring. There was a record drop in employment in the leisure and hospitality sectors. Employment in food services and drinking places fell by 105,000 in September, in an industry where most workers are not paid when absent from work.

In September, a sharp employment decline in food services and drinking places and below-trend growth in some other industries likely reflected the impact of Hurricanes Irma and Harvey.

The storms caused large-scale evacuations and severe damage to many homes and businesses. In the establishment survey, employees who are not paid for the pay period that includes the 12th of the month are not counted as employed. Many employees in areas affected by the hurricanes were likely off payrolls during the reference pay period for September.

1.33pm BST

Payrolls actually fell by 33,000 last month in figures just out, far worse than expected.

Economists had predicted 90,000 jobs would be added. Figures for August were revised up to show 169,000 jobs were added (up from a previous estimate of 156,000).

#UnitedStates Non Farm Payrolls at -33K https://t.co/AL0r1gqseN pic.twitter.com/k39zqwxVWR

1.29pm BST

Andy Haldane, the Bank of England's chief economist, is speaking about trust at the Royal Society of Arts in London.

He says that in some ways, loss of trust in institutions is the very definition of a financial crisis, including the most recent one which has been "hugely trust-busting".

Even as the scars of this crisis heal, this trust deficit might not repair itself naturally. The trust deficit that those in money and finance face may be not cyclical, not temporary, but structural and permanent.

And if that's true, then those of us within financial services, including central banks, will really have to go some to repair that deficit.

1.20pm BST

US non-farm payrolls for September are coming up at 1.30pm.

Economists polled by Reuters are predicting the number of jobs added last month fell sharply to 90,000, from 156,000 in August, largely as a result of hurricane disruption.

1.11pm BST

The Food Standards Agency (FSA) has announced it is extending its investigations to other 2 Sisters poultry plants in England and Wales, as well as its scandal-hit West Bromwich chicken processing plant.

It follows a Guardian and ITV News investigation that revealed poor hygiene standards and food safety records being altered.

Related: UK's top supplier of supermarket chicken fiddles food safety dates

12.16pm BST

Over in Greece pensioners have been protesting outside the country's highest administrative court against further cuts demanded by international creditors. It is the second such demonstration this week as anger mounts over the spectre of yet more cutbacks next year. Helena Smith reports.

12.03pm BST

Howard Archer, chief economic advisor to the EY Item forecasting group, has analysed the UK productivity figures and says Brexit negotiations could further hold back progress:

There is a risk that prolonged uncertainty may end up weighing down markedly on business investment and damage productivity. Prolonged difficult Brexit negotiations could increase this risk.

This could also be compounded if foreign companies markedly reduce their investment in the UK, diluting any beneficial spill-over of skills and knowledge.

Related: UK productivity fall leaves it well behind world's big economies

11.49am BST

Easyjet is the biggest faller in the FTSE 100 with shares down 2.7% this morning.

The low cost carrier is down despite flying a record 24.1m passengers in the three months to September. The airline also said in a trading update that it was on track to make annual profits of 405-410m, at the higher end of its guidance but below last year's 495m.

11.28am BST

A separate report from the ONS shows that the UK was less productive than the average among the G7 advanced economies in 2016.

Output per hour worked in the UK was 15.1% below the average in 2016, compared with 15.5% below in 2015.

11.11am BST

Britain was less productive between April and June compared with the previous quarter, with output per hour worked down 0.1%.

It was dragged down by the manufacturing sector, where productivity fell in the second quarter by 1.3% according to the Office for National Statistics. Meanwhile services sector productivity was up 0.2% over the period.

Poor productivity performance underpins the stagnation of real wages, and presents the government with a particular challenge since it appears likely that previous forecasts of earnings, and hence also of tax revenues, have been overoptimistic.

Commenting, on today's productivity figures, ONS Head of Productivity Philip Wales said: https://t.co/gJg5IopFKT pic.twitter.com/zkhiDZ1j2i

10.33am BST

David Madden, analyst at CMC Markets, has this take on developments in Spain and the implications for markets:

The IBEX has been hit by profit taking as yesterday's impressive bounce back was short lived. The decision by Madrid to suspend the Catalan parliament is a short-term solution to the problem, as the two sides are still locked in a stalemate.

The Spanish government is in the process of making it easier for companies headquartered in Catalonia to switch their head office to another part of Spain. While Madrid is keeping the pressure on Catalonia, it is likely that dealers will steer clear of the Spanish stock market.

10.11am BST

Spanish equities and government bonds are underperforming other European markets after Catalonia's head of foreign affairs said the region's parliament would meet on Monday.

It is in defiance of Madrid, after the the Spanish constitutional court suspended the Catalan parliament, threatening more tensions and instability.

9.42am BST

Jeremy Leaf, a north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors:

Once again, the market has proved its resilience and confounded the doom mongers. Not that there is too much to get excited about with these figures which confirm what we have seen at the coalface recently - that prices are holding up reasonably well where vendors are realistic, partly in response to a continuing shortage of stock.

Sadly, we are not seeing the hoped-for autumn bounce but a steady market is more than welcome with so much uncertain economic news.

The sudden surge in Halifax's measure of house prices-up 3% over the last three months alone-is impossible to reconcile with all the other housing market evidence.

Halifax's measure is the most volatile of all the indices we track. Other surveys show that the pipeline of demand is soft; RICS has reported that new buyer enquiries have fallen in six of the last seven months. Real wages still have further to fall over the next six months and mortgage rates will rise soon in response to the increase in banks' funding costs.

In the current cautious market, prices treading water is good - and stability plus gentle growth is very good.

But momentum remains patchy and what growth there is is wavering rather than sustained, and prices remain under intense pressure in several key regions.

9.23am BST

Halifax said UK house prices are partly being propped up by a shortage of homes on the market:

9.03am BST

Guardian Business has launched a daily email.

Besides the key news headlines that you'd expect, there's an at-a-glance agenda of the day's main events, insightful opinion pieces and a quality feature to sink your teeth into each day.

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8.56am BST

Annual house prices rose by 4% in September according to the Halifax price index.

It was the strongest rate of growth since February, bucking the trend of other recent reports which have indicated a weakening market.

The annual rate of growth has picked up for the second consecutive month, rising from 2.6% in August to 4% in September. The average house price is now 225,109 - the highest on record.

UK house prices continue to be supported by an ongoing shortage of properties for sale and solid growth in full-time employment.

There has been recent speculation on the possibility of a rise in the Bank of England base rate. We do not anticipate this will have a significant effect on transaction volumes.

8.44am BST

Wall Street hit fresh record highs on Thursday, with risk appetite among investors boosted by signs of a robust US economy.

A backdrop of strong economic data, optimism for corporate earnings in the third quarter and the recently released plan for tax cuts are fuelling the latest surge.

It's hard to see how Donald Trump's plan to revamp the US economy can live up to the hyped-up expectations but repeatedly fresh record highs indicate confidence not caution.

8.33am BST

It's pretty quiet in markets across Europe this morning, as markets await the main event at 1.30pm with the publication of the US non-farm payrolls report in September.

Markets are feeling a little more relaxed about developments in Spain, where politicians in Catalonia do no seem able to agree on the best way forward. For now at least, that is helping to ease investor fears.

8.15am BST

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone crisis and business.

The pound is under renewed pressure this morning as uncertainty builds over Theresa May's future as Prime Minister.

We did have a result that was not at all what anyone wanted, least of all what she wanted or anticipated, and... sometimes when things happen you have to take responsibility for them.

This is a view I have held for quite some time and quite a lot of colleagues feel the same way, including five former cabinet ministers.

Related: Tory ministers privately agree Theresa May should go, says Grant Schapps

The pound has had another poor week its third weekly decline in a row, as concerns about political instability as well as disappointing economic data have undermined sentiment.

seems likely that this discontent will once again amount to nothing more than hot air in the short term at least. The last thing the currency, the Conservative party and more importantly the country needs right now is the self-indulgence of another leadership battle.