US economy added 943,000 new jobs in July, as unemployment rate falls – business live

Jasper Jolly and Graeme Wearden (now)

from on 2021-08-06 13:53 (#5N10Q)

Rolling live coverage of business, economics and financial markets including July's US jobs report

Latest: US added 943k jobs in July, more than expected
Jobless rate slides to 5.4%, wages rose
Leisure and education lead jobs gains

Earlier:

2.52pm BST

And finally... the jobs report is going down well on Wall Street, where stocks keep going up.

The broad S&P 500 stock index, and the narrower Dow Jones industrial average, have both hit new all-time highs in early trading.

The Dow and the S&P 500 opened at record highs Friday morning after the monthly jobs report came in better than expected. https://t.co/4uqCNWGyqa pic.twitter.com/SuLSo1pcFP

A stellar set of US labour market data despite concerns on the Delta variant and difficulty in hiring. New jobs are created at a robust pace, working hours were up and the US unemployment rate fell notably from 5.9% to 5.4%.

Wage growth picked up to +4.0% YoY despite the lower-income job seekers that may distort wages down, suggesting positive underlying pay increases. This is a positive backdrop for consumer spending and services sector activity.

2.39pm BST

July's robust jobs report will add to the debate on when America's central bank might start to ease back on its pandemic stimulus.

Ron Temple, Co-Head of Multi Asset and Head of US Equities at Lazard Asset Management, argues that the Federal Reserve should sit tight.

Finally - jobs data is hitting high expectations. The July data combined with significant positive revisions to prior months exceeded high projections and highlights the sharp economic recovery underway.

Still, with 5.7 million fewer Americans employed than before the pandemic, it's too early to contemplate tightening monetary policy or to pull back on the reins of fiscal policy. Instead, policymakers should fix their gaze on a full recovery and on raising US economic productivity for years to come through significant infrastructure investments.

The stronger 943,000 rise in non-farm payrolls in July and upward revision to previous months' gains indicates that employment growth has shifted into a higher gear and that the drag on hiring from labour shortages is easing.

That suggests economic growth may be holding up better than we had feared and leaves open the possibility of Fed Chair Jerome Powell dropping a stronger hint that tapering is on the way at Jackson Hole in three weeks' time.

2.33pm BST

Bloomberg's Matthew Boes has pulled out some interesting charts from the US jobs report:

Incredible chart from @boes_. Leisure and hospitality workers seeing 6.6% annualized wage growth (on a 24-month basis) pic.twitter.com/me9IRA2aE5

Two more from the blog: (1) average hourly pay at restaurants relative to average hourly earnings in all industries continues to set new records pic.twitter.com/7WE9xYyFK9

(2) Black Americans continue to be left out of the employment recovery in the leisure and hospitality sector, with headcount among that cohort down 26% from two years ago (versus -10% for White Americans, -12% for Asian Americans and -9% for Hispanic or Latino Americans) pic.twitter.com/wdLDPoR6vQ

2.32pm BST

The US labor force participation rate, which measures how many people are either in jobs or looking for work, remains below its pre-pandemic levels.

It rose slightly to 61.7% in July, from 61.6% in June, still 1.6 percentage points lower than in February 2020.

Labor force participation rate for prime working age population. Like so many other stats, it's better but still a long ways to go. pic.twitter.com/3H05rzc3fL

2.27pm BST

After July's payroll gains, the US has now added 16.7m jobs since employment levels plunged in April 2020 during the first lockdown.

But that still leave 5.7m jobs lost, compared to the pre-pandemic level in February 2020 - underlining that the recovery remains incomplete.

Strong US jobs report for July shows continued strong rebound from depths of pandemic (and much faster than post-GFC recovery). But US economy still down 5.7 million jobs from pre-pandemic level of Feb 2020. pic.twitter.com/eL4L0A2nZy

2.15pm BST

The strong jobs gains over the last two months suggest that some of the worker shortages that have weighed on the US economic recovery have begun to ease.

But, the rise in the delta variant of Covid-19 could slow the jobs recovery in the coming months, cautions Richard Flynn, UK director at Charles Schwab:

The employment data is starting to shine with rocketing payroll numbers. Today's positive numbers are an encouraging sign for markets that the economic reopening has kicked into a higher gear. This growth has been supported by robust hiring by small businesses which are the largest net U.S. job creators.

However, overall job numbers are yet to fully bounce back to pre-pandemic levels, and this gap is unlikely to close this year unless we see a string of million-plus job gains each month. While news of more delta variant coronavirus cases is likely to dampen sentiment somewhat, strong earnings and ample liquidity are likely to keep markets and the wider economy buoyant for now."

2.14pm BST

Robert Frick, corporate economist at Navy Federal Credit Union, is encouraged by the rise in educational jobs last month - suggesting it could help some parents return to work.

This not only was a strong jobs report by nearly every measure, it also signals more good things to come. The 261,000 jobs added in local government and private education were particularly encouraging.

The lack of teachers has kept many parents, mainly mothers, at home to take care of their kids and supervise their education.

2.08pm BST

Jason Furman, former top economic adviser to President Obama, says today's jobs report shows the US has made a lot of progress recovering from the economic shock of the pandemic (although there's much more still to do...):

I have yet to find a blemish in this jobs report. I've never before seen such a wonderful set of economic data:

--Job gains in most sectors

--Big decline in unemployment rate, even bigger for Black & Hispanic/Latino

--Redn in long-term unemp

--Solid (nominal) wage gains

Some of the details:

943,000 jobs in July w/ large upward revisions for May & June

0.5pp reduction in unemployment rate w/ a 1.0pp reduction for Black & 0.8pp reduction for Hispanic/Latino

Labor participation rose 0.1pp

Median duration unemployed fell from 19 to 15 weeks

Still a long way to go: we're about 7.5 million jobs short of where we should have been right now absent the pandemic.

But we've made a lot of progress.

But is it "a lot" coming close to "substantial"? The Fed will be deciding that.

2.01pm BST

There were notable job gains in leisure and hospitality, in local government education, and in professional and business services" last month, says the U.S. Bureau of Labor Statistics.

Employment in leisure and hospitality surged by 380,000, with two-thirds (253k) of those gains at food services and drinking places' as restaurants and bars took on more staff.

Staffing fluctuations in education due to the pandemic have distorted the normal seasonal buildup and layoff patterns, likely contributing to the job gains in July. Without the typical seasonal employment increases earlier, there were fewer layoffs at the end of the school year, resulting in job gains after seasonal adjustment.

Big job gains across the board in July:

Restaurants: +253,000
Education (public): +221,000
Hotels: +74,000
Biz services: +60,000
Entertainment: +53,000
Warehouse/transport: +50,000 (19k in transit!)
Education (private) +40,000
Health: +37,000
Manufacture: +27,000
Laundry: 15,000

1.54pm BST

Pay also continued to pick up last month, suggesting that some US firms are raising wages to address labor shortages and record vacancies.

Average hourly earnings rose by 0.4% during the month, and were 4.0% higher than a year ago, July's jobs report shows.

Average hourly earnings +4% y/y vs. +3.9% est. & +3.7% in prior month pic.twitter.com/FZEDb6uE6h

The good news:
Nonfarm payrolls +943k vs. +870k expected
Net revisions to nonfarm payrolls +119k
Avg hourly earnings +0.4% m/m and +4.0% y/y, both above expectations
Unemployment rate 5.4% pic.twitter.com/iIfY3BSIhq

1.39pm BST

The US created 943,000 new jobs in July, a stronger performance than expected, suggesting that the economy continues to recover.

The unemployment rate has dropped sharply, to 5.4% from 5.9% in June.

BREAKING: The US economy gained back 943,000 jobs in July, surpassing expectations. It's the biggest gain since last August.

Unemployment rate: 5.4% (down from 5.9% in June)

**The US has recovered ~75% of jobs lost during the pandemic. 5.7 million still out of work**

Better-than-expected July nonfarm payrolls at +943k vs. +858k est. & +938k in prior month; great revision in June from +850k pic.twitter.com/m95D5lAqjd

1.21pm BST

We're approaching the US non-farm payrolls release (1:30pm BST, or 8.30am EDT) - one of the most closely followed data points in global economics because of its role as a bellwether for the US economy.

July's non-farm payrolls report comes out in about twenty minutes. Gotta say, I don't think I can remember a period with so many mixed signals and this is a report that could be anywhere from huuuuge (>1m) to merely moderate (<400k). pic.twitter.com/0aRjlvnCCj

High-impact Events #ToWatch #AUD -> RBA Monetary Policy Statement#USD -> NFP (Jul) -> expecting 870K jobs added to economy (up 20K from June)#stocks #equities #forexmarket #forextrading #CFD #USD #EUR #forex #NFP #nonfarmpayroll #payroll #USEconomy #australialockdown pic.twitter.com/vrp6fBrfEZ

NFP Friday Notes:
NFP @business Survey +870K seems reasonable. Any deviation will drive volatility and rumors about Jackson Hole
Baker Hughes Rigs

12.36pm BST

As we approach lunchtime in London there isn't much moving out there.

The FTSE 100 is very flat indeed - the index has moved up by less than half a point - a lesser-spotted 0% move.

12.03pm BST

Morrisons shares have risen by 2.8% after the latest bid from the Fortress-led private equity consortium.

You can see the jump after it was announced in the below graph (although there must have been an error with the feed during that spike downwards).

11.57am BST

The new bid for Morrisons will also include extra financial firepower from Cambourne Life Investment, a subsidiary of the Singaporean sovereign wealth fund, GIC.

The investors' shares of the company after the takeover would be: Fortress - 65%; Koch Real Estate Investments - 22%; and Cambourne - 13%.

11.43am BST

The latest bid will put the ball very firmly back in Clayton, Dubilier and Rice's court.

It came after pressure from Morrisons' biggest shareholder for the board to talk to investors other than the Fortress group.

Fortress consortium raises bid for Morrisons to 270p a share, plus the 2p divi, from 252p

Scene in Clayton, Dubilier & Rice offices right now... pic.twitter.com/dpgX1IuNED

11.35am BST

Morrisons' board has unanimously backed the renewed offer from the Fortress consortium - perhaps unsurprising considering the fact that they backed a bid that was worth 400m less.

The consortium also includes the Canada Pension Plan Investment Board and an investment company controlled by the US billionaire Koch family (who might also prove controversial stewards for a major British employer).

Bidco notes the speculation regarding a possible counter-offer by CD&R. Bidco remains committed to becoming the new owner of Morrisons and to being a responsible long-term steward of this great British company through the next stage of its evolution. Accordingly, Bidco has engaged with the Morrisons board and its advisers in relation to the value of the original Fortress offer.

11.18am BST

And more breaking retail news: Morrisons has announced that it has received a fresh offer from a group led by US private equity Fortress that values the supermarket at 6.7bn.

The 270p-per-share bid, plus a 2p-per-share dividend, improves on Fortress's previous offer, which valued the supermarket chain at 6.3bn.

11.09am BST

The Blackburn-based Issa brothers became billionaires by building up a petrol stations empire, EG Group. It appears they are keen to stamp their authority on Asda.

They will work directly with executives at the supermarket chain after the abrupt departure of Burnley. That suggests that a new chief executive, whoever it may be, will be taking her or his lead from the Issas.

"Mutually agreed" that Roger Burnley will leave Asda now rather than stay on through new CEO appointment and handover

Follows exit of interim CFO and head of George

Issas "will work closely with the Asda team"

No doubt who is running the show now

Roger Burnley has left Asda much sooner than the one year he said he would be staying for when he announced his departure. His premature exit marks one month since the CMA cleared the takeover and the Issas were able to come in and run the supermarket...No CEO successor yet.

10.51am BST

Roger Burnley has stepped down from Asda at least four months earlier than initially planned, in a move that will leave Britain's third-largest supermarket without a boss as it adjusts to new owners.

The Asda business has proven its resilience over the last 18 months and has a strong platform in place for further innovation and growth. We have mutually agreed with Roger that now is the right time for him to step down from the business following a transition period under our ownership.

We would like to thank Roger for his leadership and contribution during his time with the business, particularly during the last year. We have a great team of more than 140,000 colleagues at Asda, and we look forward to supporting all of them to deliver for our customers in the second half of the year.

10.31am BST

Credit Suisse will repay another $400m to investors into supply chain finance funds linked to Greensill Capital, the investment company that collapsed in March.

The Swiss bank has suffered an annus horribilis. As well as having to pay for the Greensill debacle, its bankers backed Archegos, a hedge fund that blew up, and it is looking at a big restructuring.

Together with the cash that has already been distributed and cash remaining in the funds, the cash position is equivalent to approximately $6.6bn or 66% of the funds' assets under management at the time of their suspension.

Liquidation proceeds will be distributed as soon as feasible until the investors receive the funds' total net collected liquidation proceeds.

Investors will receive notification of these payments. Management fees are waived with immediate effect.

10.06am BST

Here's an interesting story from overnight: Apple has said it will scan iPhones in the US for images of child sexual abuse.

The tool designed to detected known images of child sexual abuse, called neuralMatch, will scan images before they are uploaded to iCloud. If it finds a match, the image will be reviewed by a human. If child abuse is confirmed, the user's account will be disabled and the US National Center for Missing and Exploited Children notified.

Separately, Apple plans to scan users' encrypted messages for sexually explicit content as a child safety measure, which also alarmed privacy advocates. The detection system will only flag images that are already in the centre's database of known child abuse images. Parents taking photos of a child in the bath presumably need not worry.

9.39am BST

The FTSE 100 has sagged a little bit more - it's now down 0.2% today.

But at the top end of the London Stock Exchange this morning is... the London Stock Exchange.

The 300-year-old bourse is trying to transform into a one-stop shop for data, trading and analytics with its takeover of Refinitiv. However the costs of absorbing the data provider have worried some investors, sending its shares down 20% since early March when it gave more details on the integration.

The group said on Friday that about 77m of cost synergies from the Refinitiv takeover have been realised on a run-rate basis. It expects that to hit 125m by the end of the year, up from its previous guidance of 88m.

9.17am BST

By any conventional yardstick, this is still a very brisk market," said Jonathan Hopper, CEO of Garrington Property Finders - but there are some signs of a bit more scrutiny from buyers.

He said:

Astute buyers have begun to ask much tougher questions on price. After six months of having things almost entirely their own way as prices rose almost by the week, sellers are finally being forced into a reality check.

On the front line we're starting to see buyers adopt a more pragmatic view on pricing, and a growing number of sellers are having to rein in their price aspirations.

Despite flickering, and frankly welcome signs, that the fuel igniting the market may be running low, house prices continue to demonstrate a complete disconnect from economic reality.

Only once the pandemic fallout picture becomes clear, with government stimulus fully withdrawn, and people start returning to the office en masse, will the read across to the housing market become meaningful. 2022 still looks more likely to see a correction of sorts than not.

9.08am BST

Let's get some analysis of Halifax's housing data from this morning. It showed that UK house prices are still rising rapidly, but the pace of growth appears to be slowing.

Jan Crosby, UK head of infrastructure, building and construction at KPMG, an accountancy firm, said:

While the market is buoyant, overall annual growth is slowing and we are seeing much higher demand than supply, with owners nervous about putting their properties up for sale in case they can't find the right home to buy, leading to low stock for estate agents.

July's rise in prices on the Halifax measure contrasted with a fall in Nationwide's index. But it offers some tentative evidence that the tapering of the stamp duty holiday on 30 June has not affected the housing market too much and that other factors have continued to support house prices. These include government support to household incomes and ultra-low mortgage rates. While the former, notably the furlough scheme, will finish in the autumn, there seems little prospect of interest rates rising until well into next year, even after August's MPC meeting delivered a more hawkish tone.

The pandemic has also had potentially long-lasting effects on property preferences, including a race for space' as people seek larger homes in a world of more home working. There is plenty of fuel for property deposits provided by the substantial savings accumulated by households during lockdowns. Meanwhile job and incomes losses during the pandemic have disproportionately affected younger, lower-paid, people who are generally not in the market to buy a property.

8.36am BST

Millions of homes will be forced to pay some of the highest energy bills for the last decade after the industry regulator gave suppliers the green light to raise their prices by up to 153 a year.

8.32am BST

Output from Germany's mighty manufacturers fell in June, likely in part due to the global shortage of computer chips, according to official data that took economists by surprise.

Auto production was 29% below its pre-pandemic level, reflecting the impact of component shortages, notably of semiconductors. These are now expected to continue throughout the second half of the year and will hold back an otherwise strong economic recovery.

Media reports suggest that auto manufacturers themselves think the component shortages are likely to continue into next year although they expect (or hope) the problems will be less severe. So a full recovery for Germany remains some way off.

8.11am BST

It's looking very much like a Friday in August on Europe's stock markets. The FTSE 100 has eased to a gentle decline in early trades, down eight points, or 0.1%, to 7,111 points.

Here are the opening snaps from Europe's main markets:

8.02am BST

Good morning, and welcome to our live coverage of business, economics, and financial markets.

UK house prices rose by 7.6% in the year to July, but Halifax, the lender which reported the data, suggests this might be a sign of a cooling market" after months of pumped-up activity.

Recent months have been characterised by historically high volumes of buyer activity, with June the busiest month for mortgage completions since 2008. This has been fueled both by the race for space' and the time-limited stamp duty break. With the latter now entering its final stages, buyer activity should continue to ease over the coming months, and a steadier period for the market may lie ahead.

Latest industry figures show instructions for sale are falling and estate agents are experiencing a drop in their available stock. This general lack of supply should help to support prices in the near-term, as will the exceptionally low cost of borrowing and continued strong customer demand.

Source	RSS or Atom Feed
Feed Location	http://feeds.theguardian.com/theguardian/business/economics/rss
Feed Title
Feed Link	http://feeds.theguardian.com/