US jobs report smashes forecasts, as wage growth rises – business live

Full story: US hiring stronger than expected as economy adds 353,000 monthly jobs

Dominic Rushe

The US jobs market defied fears of a downturn again in January with employers adding 353,000 new jobs over the month, the labor department announced on Friday.

The US jobs market has remained strong despite an aggressive series of interest rate rises by the Federal Reserve, aimed at cooling the economy and bringing down the rate of inflation. In January the unemployment rate was 3.7%, close to a 50-year low.

More here.

The US dollar is strengthening on the back of the blowout US jobs report.

It’s up almost 0.5% against the pound today, pushing sterling down to $1.2690.

Today’s strong US jobs report indicates that demand in the labour market is higher than expected, says Richard Flynn, managing director at Charles Schwab UK, adding:

Up until recently, this may have set alarm bells ringing in the market. Cooler employment figures would imply lower inflationary pressures, potentially paving the way for rate cuts. And while lower interest rates would surely be welcomed, it is becoming increasingly clear that markets and the economy are coping well with the high rate environment, so investors are perhaps feeling that the need for monetary policy to ease is less urgent.

Today’s figures may be another factor delaying the Fed’s first rate cut closer to summer, but if the economy maintains its comfortable trajectory, that might not be a bad thing. What’s the hurry?”

Neal Keane, head of global sales trading at ADSS, says investors continue to be caught off guard as data continues to surprise to the upside, making the case for rate cuts less obvious.

Fed Chair Powell walked back market expectations for a March rate cut during Wednesday’s press conference – and while markets now expect the Fed to cut in May, this is dependent on deteriorating economic data with inflation continuing to trend lower.”

Any thoughts of recession are off the mark, reckons Neil Birrell, chief investment officer at Premier Miton Investors:

The US employment data provided a shock, beating expectations by miles, with earnings much higher than expected as well. These numbers show the US economy to be strong and will sway anyone thinking a March rate cut was on the way to look further out.

Any thoughts of recession are off the mark as well for now, and markets will have to adjust towards the Fed’s view of when policy will change.”

US wage growth was also stronger than expected in January

Over the past 12 months, average hourly earnings have increased by 4.5%, today’s jobs report shows.

That’s ahead of forecasts of 4.1% growth.

In January, average hourly earnings for all employees on private nonfarm payrolls rose by 19 cents, or 0.6%, to $34.55.

Newsflash: The US economy added twice as many jobs as expected in January, as America’s labor market remained stronger than expected.

Total nonfarm payroll employment rose by 353,000 in January, new data from the U.S. Bureau of Labor Statistics shows, beating forecasts of an increase of 180,000 jobs.

The unemployment rate remained at 3.7 percent.

The BLS says:

Job gains occurred in professional and business services, health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.

December’s jobs growth has been revised up too, to 333.000, from the first estimate of 216,000.

This jobs growth should cool concerns that the US economy was faltering, but also suggests it will take longer for the US Federal Reserve to start cutting interest rates.

The Bank of England’s chief economist has predicted that the first cut in interest rates is probably still some time away.

Speaking at an online briefing to the Bank’s regional agents today, Huw Pill said the central bank should focus on keeping policy tight enough to squeeze out domestic inflationary pressures, adding:

“Crucially, for me at least, we don’t have sufficient evidence yet. So that moment at which Bank Rate cuts might be possible is still some way off.”

Yesterday’s Bank forecasts showed inflation could drop to its 2% target this spring, before rising back to 2.75% by the end of this year.

Newsflash: Donald Trump has declared that he would not reappoint Jerome Powell to head the Federal Reserve if he is reelected in November.

Speaking to Fox Business, Trump claimed that Powell was looking to lower interest rates to help President Joe Biden in the election race.

When asked about keeping Powell, Trump replied:

“No, I wouldn’t.

“I think he’s going to do something to help the Democrats, if he lowers interest rates”

The financial markets have been anticipating a flurry of Fed rate cuts this year for some time. But on Wednesday, Powell actually tried to dampen speculation that monetary policy could be eased as soon as March.

Hope of rate cuts has pushed up the financial markets since last autumn.

Trump, though, was keen to take the credit

Bloomberg explains:

Asked why the stock market was doing so well if the economy is in bad shape under Biden, Trump said traders were optimistic he would return to the White House.

“Because they think I’m going to be elected,” he said.

During Trump’s first time, he declined to reappoint Janet Yellen as Fed chair – choosing Jerome Powell as her successor.

Newsflash: Superdry has told the City that its chief executive, Julian Dunkerton, is working on a bid to take the company private!

In a statement, Superdry says it “notes the movement in its share price” (doubling this morning).

And it reveals it has accepted a request from Dunkerton, co-founder of the company, to explore the possibility of making an offer for the Company and to start talks with potential sources of finance.

Dunkerton now has until 5pm on 1 March to make a bid, or walk away, under the City’s takeover rules.

Superdry says it created an independent committee to consider Dunkerton’s request, adding:

Julian Dunkerton has since confirmed to the Transaction Committee that he is engaged in discussions with potential financing partners (“Potential Sponsors”) for the purposes of considering options in respect of the Company, which may include a possible cash offer for the entire issued and to be issued share capital of the Company, not already owned by him. These discussions are at a preliminary stage and no decisions have been made.

The Transaction Committee has provided limited additional information to Julian Dunkerton and the Potential Sponsors to facilitate further exploration of a possible offer for the Company. There can be no certainty that an offer will be made, nor as to the terms on which any such offer might be made.

Dunkerton is Superdry’s largest shareholder, with 26% of the company.

Back in 2019, Dunkerton won a battle to rejoin Superdry’s board, after a failed revamp by its management resulted in a collapse in sales and profits