US jobs growth smashes expectations - as it happened

The US jobs market shrugged off the government shutdown in January, with 304,000 jobs created last month

• US economy adds jobs for record 100th month
• 'Clear risk of recession' for UK manufacturing
• Pound falls after weak manufacturing data
• Eurozone manufacturing scrapes growth in January
• TSB computer meltdown bill rises to 330m
• China manufacturing slumps to three-year low

3.09pm GMT

Before we close up for the day, here is a quick summary of the main events:

The pound fell against the dollar and the euro after a survey showed growth in the UK manufacturing sector slowed significantly in January. The authors of the IHS Markit report said there is now a "clear risk of recession" for UK manufacturing.

2.34pm GMT

US markets are mixed after the opening bell:

2.27pm GMT

The US President Donald Trump is feeling upbeat about economic prospects after those strong jobs figures:

Best January for the DOW in over 30 years. We have, by far, the strongest economy in the world!

2.25pm GMT

The big question for investors is whether the unexpected surge in US job creation will give policymakers at the Federal Reserve reason for a rethink.

On Wednesday, the Fed's chair Jerome Powell surprised the market with a more cautious message, saying the central bank was in no hurry to further raise interest rates and emphasising greater risks to the economic outlook.

A tight labour market and healthy wage growth support economic growth, and today's data should buoy consumer spending and could boost the stock market. However, a string of positive data could lead the Federal Reserve to "un-pause" its rate hike cycle sooner than expected, which would likely result in volatility and pull backs.

This week the Fed suggested future rate decisions would be dependent on economic data, and that monetary policy was not on a predetermined course. But despite declining expectations, the Fed may still continue to hike rates this year-a slower pace of rate hikes doesn't necessarily mean no rate hikes, especially if we get more strong jobs reports like today.

2.17pm GMT

The US Labor Department said there were job increases in a number of sectors in January, including leisure and hospitality, construction, health care, and transportation and warehousing.

The department notes that it remained open during the government shutdown, with no disruption to its data collection.

1.48pm GMT

Here is our full story on the better-than-expected non-farm payrolls report from Dominic Rushe, business editor for the Guardian US.

As he points out, the US has created jobs for a record 100 months in a row - shaking off last month's government shutdown.

Related: US economy adds jobs for record 100th consecutive month

1.35pm GMT

US non-farm payrolls are out and its a much bigger than expected in January, with 304,000 jobs added.

That smashed expectations of 165,000.

1.21pm GMT

With 10 minutes to go until the US non-farm payroll report for January here is what economists are expecting:

(Numbers in brackets are December figures.)

12.34pm GMT

Sticking with the automotive industry, Japanese car maker Honda is bringing forward some of its UK production as well as stockpiling parts as Brexit draws closer.

To avoid any possible disruptions at the end of March... we're making a number of preparations including front-loading some production to ship or step up inventories.

12.24pm GMT

More on those Ford job cuts from Jasper Jolly:

Ford has cut 400 jobs at its engine plant in Bridgend as part of cost-cutting plans as it aims to return its European operations to profit.

11.56am GMT

Sky is reporting that that the first wave of job cuts at Ford's Bridgend plant will see 400 roles go later this year:

Revealed: Ford begins first wave of UK jobs cull with voluntary redundancy programme at Bridgend engine plant in Wales that will see up to 400 roles axed later this year. Unions notified of the move this morning. Full story on @SkyNews soon.

11.42am GMT

Eurozone inflation fell to 1.4% in January from 1.6 in December.

The "flash" estimate from statistics office Eurostat was in line with expectations.

The small increase in core inflation in the euro-zone in January is a rare bit of good news for the ECB. But it remains a long way below the ECB's target and, with economic activity having slowed sharply, we doubt that this is the start of an upward trend.

11.10am GMT

More sad times for the UK high street as off-licence chain Oddbins is the latest retailer to call in administrators.

Retailers are undoubtedly feeling the strain. The continued decline in consumer spending, pointing to a squeeze on household finances, combined with rising living and national wages have put increased pressure on retailers' bottom lines.

10.59am GMT

Stephen Cooper, Head of Industrial Manufacturing at KPMG:

The underlying data does not paint a rosy picture. And when taken with poor results from Europe - the big four countries in negative territory, macroeconomic issues and a downturn in activity in China, these factors suggest that a slip into recession for UK manufacturing is a distinct possibility.

With this and the continuing Brexit saga, we continue to encourage manufacturers to take positive steps to understand their supply chains, mitigate risks and ensure, to the best of their ability, that financing is available in case conditions deteriorate further.

A weaker January purchasing managers survey points to the manufacturing sector struggling at the start of 2019 amid a lacklustre domestic economy, a less robust global economic environment and heightened Brexit uncertainties. The survey fuels our belief that GDP growth will likely be limited to 0.2-0.3% quarter-on-quarter in the first quarter of 2019.

The trends of UK business hunkering down to protect themselves from disruption is likely to mean that inventory building continues. With auto manufacturers announcing factory closures for April (bringing forward annual retooling) it implies that the manufacturing output numbers will continue to soften over the next few months irrespective of what sort of Brexit agreement is made.

10.24am GMT

The pound has extended losses after the weak UK manufacturing PMI, which signalled a sharper-than-expected slowdown in the sector.

It is down 0.3% against the dollar at $1.3068, and down 0.5% against the euro at a1.1399.

10.16am GMT

Rob Dawson, director at IHS Markit (which publishes the PMI), says UK manufacturers spent January preparing for Brexit.

Stockpiling hit its highest level since the survey began 27 years ago as firms ramp up preparations for a no-deal Brexit and potential customs hold-ups at borders.

The start of 2019 saw UK manufacturers continue their preparations for Brexit. Stocks of inputs increased at the sharpest pace in the 27-year history, as buying activity was stepped up to mitigate against potential supply-chain disruptions in coming months.

There were also signs that inventories of finished goods were being bolstered to ensure warehouses are well stocked to meet ongoing contractual obligations.

9.35am GMT

Breaking: Growth in UK manufacturing slowed significantly in January, putting the sector in "clear risk" of falling into recession.

That's according to IHS Markit, which has just published the UK manufacturing PMI for January.

9.25am GMT

A country-by-country breakdown of the manufacturing PMI shows the sector shrank in both Germany and Italy in January.

The 50 mark separates expansion from contraction:

9.21am GMT

Chris Williamson, chief economist at IHS Markit, says the latest eurozone PMI suggests the region's manufacturing sector is in recession and will act as a drag on the economy in the first quarter.

Some temporary factors remain evident, including an auto sector that is struggling to regain momentum after new emissions regulation and some signs of 'yellow vest' disturbances dampening demand in France.

However, there appears to be a more deep-rooted malaise setting in, which reflects widespread concerns about the destabilising effect of political uncertainty and the damage to exports from rising trade protectionism.

9.15am GMT

Growth in eurozone factory activity slowed in January according to Markit's manufacturing PMI survey.

The headline index - which combines output, orders and jobs - was 50.5, down from 51.4 in December and bang in line with expectations. Anything above 50 signals growth.

8.54am GMT

Connor Campbell, analyst at spread betting firm Spreadex, gives his take on the mood among investors this morning:

Some positive US-China trade talk noise overnight failed to provoke any substantial growth on Friday morning, the signs of progress undermined by data from China that underscored the need for a deal.

Though the details what of happens next are still unclear, with Donald Trump claiming he will meet President Xi Jinping soon and reports of a potential mid-February meeting in Beijing for yet more negotiations, the overall tone from the January-ending trade talks was one of cautious optimism. This includes China agreeing to 'vigorously expand' its US imports, alongside further discussions about intellectual property theft and technology transfer.

8.50am GMT

Major European markets are up this morning, with the exception of the IBEX in Spain.

It's a fairly subdued start though, as investors weigh the negative China manufacturing data against optimism over US/China trade talks.

8.43am GMT

TSB's shambolic attempt to transfer customer accounts to a new IT system has proved costly.

The attempt went badly wrong, locking customers out of their accounts, showing incorrect balances, and even allowing some customers to see the accounts of others.

Related: TSB computer meltdown bill rises to 330m

8.30am GMT

One in three UK firms are planning to relocate some of their operations abroad in the event of a no-deal Brexit, according to a survey by the Institute of Directors.

The lobby group says 29% of firms in a survey of 1,200 members had either already moved part of their business or were planning to do so in response to threat of a hard Brexit.

We can no more ignore the real consequences of delay and confusion than business leaders can ignore the hard choices that they face in protecting their companies.

Change is a necessary and often positive part of doing business, but the unavoidable disruption and increased trade barriers that no deal would bring are entirely unproductive.

Related: One in three UK firms plan for no-deal Brexit relocation, IoD says

8.14am GMT

Shilan Shah, senior economist at Capital Economics, says the China Caixin manufacturing PMI paints a much bleaker picture than the official PMI published a day earlier.

With the headwinds from cooling global growth and the lagged impact of slower credit growth set to intensify, China's economy is likely to weaken further over the coming months.

Chilly econ winter in China as Jan Caixin PMI contracts again. This is more about private sector than the official PMI yesterday. Most likely means layoffs and early shutdowns for Ch New Year. China factory sector contracts at fastest pace in 3 years https://t.co/yrg4F708GK

7.58am GMT

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

The Chinese manufacturing data has come in below expectations this morning, adding to the picture of a slowdown in the world's second largest economy.