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U.K. unemployment Rate Falls Amid Signs Labor Market May Be Cooling

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U.K. unemployment rate
  • U.K. unemployment Rate Falls Amid Signs Labor Market May Be Cooling

U.K. unemployment fell to its lowest rate in 11 years in the third quarter but there are signs that the labor market is slowing in the wake of the Brexit vote.

The jobless rate fell to 4.8 percent from 4.9 percent in the second quarter, the Office for National Statistics figures Wednesday show. But the economy added only 49,000 workers, half the number expected and down from a 172,000-increase in the previous three months.

“Unemployment is at its lowest for more than 10 years, and the employment rate remains at a record high,” ONS statistician David Freeman said in a statement. “Nonetheless, there are signs that the labor might be cooling, with employment growth slowing.”

There were also signs that rising inflation is taking its toll on living standards, as real wages grew just 1.7 percent in the third quarter, matching the slowest rate since February 2015.

A cooling jobs market and rising prices threaten to undermine consumer spending, which has driven almost four years of economic expansion. Uncertainty as Britain negotiates its split from the European Union is expected to hit hiring and investment, making it hard for workers to negotiate significant pay increases.

Sapping Strength

Unemployment fell by 37,000 to 1.6 million as the economy registered little increase in the economically active workforce. Jobless claims — a narrower measure of unemployment — increased for a third month in October. They gained 9,800, the biggest rise since May, following an upwardly revised 5,600 increase in September.

“Today’s figures confirmed the indications from the surveys that the Leave vote is starting to sap the jobs recovery of its previous strength,” said Ruth Gregory, an economist at Capital Economics Ltd. in London. “The weakening in the employment surveys suggest that employment growth will probably slow further. This moderation should prevent wage growth from picking up in coming months.”

Average-earnings growth stayed at 2.3 percent in the three months through September, though the rate excluding bonuses picked to 2.4 percent from 2.3 percent.

The pressure on real wages is expected to intensify, with some economists predicting inflation could reach almost 4 percent next year as the 12 percent fall in the pound since the Brexit vote drives up import costs.

The Bank of England has said it is prepared to tolerate inflation above its 2 percent target for now. Much will depend on whether cost pressures in the labor market remain subdued.

That in turn partly depends on whether Britain can improve its poor productivity performance. New figures from the ONS Wednesday showed output per hour rose just 0.2 percent in the third quarter, compared with a 0.6 percent increase in the previous three months.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

Crude Oil

Oil Prices Continue to Slide: Drops Over 1% Amid Surging U.S. Stockpiles

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Crude Oil

Amidst growing concerns over surging U.S. stockpiles and indications of static output policies from major oil-producing nations, oil prices declined for a second consecutive day by 1% on Wednesday.

Brent crude oil, against which the Nigerian oil price is measured, shed 97 cents or 1.12% to $85.28 per barrel.

Similarly, U.S. West Texas Intermediate (WTI) crude slumped by 93 cents or a 1.14% fall to close at $80.69.

The recent downtrend in oil prices comes after they reached their highest level since October last week.

However, ongoing concerns regarding burgeoning U.S. crude inventories and uncertainties surrounding potential inaction by the OPEC+ group in their forthcoming technical meeting have exacerbated the downward momentum.

Market analysts attribute the decline to expectations of minimal adjustments to oil output policies by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, known collectively as OPEC+, until a full ministerial meeting scheduled for June.

In addition to concerns about excess supply, the market’s attention is also focused on the impending release of official government data on U.S. crude inventories, scheduled for Wednesday at 10:30 a.m. EDT (1430 GMT).

Analysts are keenly observing OPEC members for any signals of deviation from their production quotas, suggesting further volatility may lie ahead in the oil market.

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Energy

Nigeria Targets $5bn Investments in Oil and Gas Sector, Says Government

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Crude Oil - Investors King

Nigeria is setting its sights on attracting $5 billion worth of investments in its oil and gas sector, according to statements made by government officials during an oil and gas sector retreat in Abuja.

During the retreat organized by the Federal Ministry of Petroleum Resources, Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, explained the importance of ramping up crude oil production and creating an environment conducive to attracting investments.

He highlighted the need to work closely with agencies like the Nigerian National Petroleum Company Limited (NNPCL) to achieve these goals.

Lokpobiri acknowledged the challenges posed by issues such as insecurity and pipeline vandalism but expressed confidence in the government’s ability to tackle them effectively.

He stressed the necessity of a globally competitive regulatory framework to encourage investment in the sector.

The minister’s remarks were echoed by Mele Kyari, the Group Chief Executive Officer of NNPCL, who spoke at the 2024 Strategic Women in Energy, Oil, and Gas Leadership Summit.

Kyari stressed the critical role of energy in driving economic growth and development and explained that Nigeria still faces challenges in providing stable electricity to its citizens.

Kyari outlined NNPCL’s vision for the future, which includes increasing crude oil production, expanding refining capacity, and growing the company’s retail network.

He highlighted the importance of leveraging Nigeria’s vast gas resources and optimizing dividend payouts to shareholders.

Overall, the government’s commitment to attracting $5 billion in investments reflects its determination to revitalize the oil and gas sector and drive economic growth in Nigeria.

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Commodities

Palm Oil Rebounds on Upbeat Malaysian Exports Amid Indonesian Supply Concerns

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Palm Oil - Investors King

Palm oil prices rebounded from a two-day decline on reports that Malaysian exports will be robust this month despite concerns over potential supply disruptions from Indonesia, the world’s largest palm oil exporter.

The market saw a significant surge as Malaysian export figures for the current month painted a promising picture.

Senior trader David Ng from IcebergX Sdn. in Kuala Lumpur attributed the morning’s gains to Malaysia’s strong export performance, with shipments climbing by a notable 14% during March 1-25 compared to the previous month.

Increased demand from key regions like Africa, India, and the Middle East contributed to this impressive growth, as reported by Intertek Testing Services.

However, amidst this positivity, investors are closely monitoring developments in Indonesia. The Indonesian government’s contemplation of revising its domestic market obligation policy, potentially linking it to production rather than exports, has stirred market concerns.

Edy Priyono, a deputy at the presidential staff office in Jakarta, indicated that this proposed shift aims to mitigate vulnerability to fluctuations in export demand.

Yet, it could potentially constrain supply availability from Indonesia in the future to stabilize domestic prices.

This uncertainty surrounding Indonesian policies has added a layer of complexity to palm oil market dynamics, prompting investors to react cautiously despite Malaysia’s promising export performance.

The prospect of Indonesian supply disruptions underscores the delicacy of global palm oil supply chains and their susceptibility to geopolitical and regulatory factors.

As the market navigates these developments, stakeholders remain attentive to both export data from Malaysia and policy shifts in Indonesia, recognizing their significant impact on palm oil prices and market stability.

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