- Payrolls in U.S. Increase 227,000 While Wage Growth Weakens
U.S. employers added the most workers in four months while wage growth slowed more than projected, suggesting some slack remains in the labor market.
January’s 227,000 increase in payrolls followed a 157,000 rise in December, a Labor Department report showed Friday in Washington. The median forecast in a survey of economists called for a 180,000 advance. The jobless rate rose to 4.8 percent, and average hourly earnings grew 2.5 percent from January 2016, the weakest since August.
The data, representing the final figures under President Barack Obama, indicate the job market is still enjoying steady growth though isn’t tight enough yet to result in a bonanza for worker pay. While analysts expect hiring to cool as the economy nears full employment, President Donald Trump has pledged to bring people back into the workforce and boost wages further through tax cuts, infrastructure investment and looser regulation.
“There’s more slack in the labor market than the unemployment rate implies, but we’re continuing to make progress in absorbing that slack,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, who had estimated a 220,000 job gain in January. “As that happens, wage and salary growth should gain additional traction.”
Federal Reserve policy makers, who left interest rates unchanged on Wednesday, indicated in their post-meeting statement that there’s still room for improvement in the job market. While the unemployment rate “stayed near its recent low” in December, “some further strengthening” is expected in labor conditions.
Officials in December penciled in three quarter-point interest-rate increases this year, based on the median projection.
The January results were helped by hiring in construction, retail, finance and professional services. The 36,000 increase in construction payrolls was the largest since March.
Revisions to the previous two months subtracted a total of 39,000 jobs from payrolls. November’s gain was cut to 164,000 from 204,000, while December’s change rose by 1,000 to 157,000.
January payroll estimates from economists surveyed by Bloomberg ranged from gains of 140,000 to 238,000.
The unemployment rate, which is derived from a separate Labor Department survey of households, increased from the previous month’s 4.7 percent, where it was projected to hold in January.
The participation rate, which shows the share of working-age people in the labor force, increased to a four-month high of 62.9 percent from 62.7 percent. It has been hovering close to the lowest level in more than three decades.
There were 5.84 million Americans in January who were working part-time though would rather have a full-time position, a measure known as part-time for economic reasons.
The Labor Department’s figures included its annual benchmark update, which aligns employment data with state unemployment-benefit tax records.
For all of 2016, 2.24 million jobs were created, more than the previous estimate of 2.16 million.
Adjustments to population estimates starting in January make the unemployment and participation rates difficult to compare with previous months. When removing these adjustments, the labor force rose by 584,000, a sign people are being drawn off the sidelines.
Private employment, which excludes government agencies, rose by 237,000 in January after a 165,000 increase the prior month.
Government employment fell by 10,000, with state and local agencies subtracting 14,000 and federal payrolls adding 4,000.
Factory payrolls rose by 5,000, after an 11,000 increase in the previous month.
Compared with manufacturers, service providers including restaurants, business services and health-care are typically less exposed to headwinds such as the stronger dollar and the health of overseas economies.
Retailers increased payrolls by 45,900. Employment in financial activities was up 32,000, professional and business services rose by 39,000, and leisure and hospitality was up 34,000.
The news on wages was less bright. The gain in average hourly earnings over the 12 months ended in January was less than the 2.7 percent median forecast, despite any possible boost from minimum-wage hikes at the start of 2017, and followed a revised 2.8 percent gain the prior month.
Compared with December, worker pay increased 0.1 percent. Overall wage gains were depressed by a 1 percent drop in pay in financial industries.
The average workweek for all workers was unchanged at 34.4 hours.
Trump spent last year’s election campaign calling the official unemployment rate “phony” and arguing it overstates the strength of the labor market. More recently, his Treasury secretary nominee, Steven Mnuchin, cited the so-called U-5 rate as an alternative indicator.
That rate, which increased to 5.8 percent in January from 5.7 percent in December, includes discouraged workers as well as a group called marginally attached workers, who aren’t working or actively looking for work but want a job.
The underemployment rate — which includes part-time workers who’d prefer a full-time position and people who want to work but have given up looking — rose to 9.4 percent from 9.2 percent.
Global Oil Drops as Coronavirus Infections Rises in India and Other Nations
Oil prices declined on Monday during the Asian trading session amid rising concerns that the surge in coronavirus in India and other nations could force regulators to enforce stronger measures at curbing its spread and eventually affect economic activity and drag on demand for commodities like crude oil.
Brent crude oil, against which Nigerian oil is priced, declined by 22 cents or 0.33 percent to $66.55 per barrel at 8:19 am Nigerian time on Monday, following a 6 percent surge last week.
The US West Texas Intermediate (WTI) declined by 18 cents or 0.29 percent to $62.95 per barrel, after it gained 6.4 percent last week.
The decline was after India reported 261,500 new coronavirus infections on Sunday, taking the country’s total cases to almost 14.8 million, second to only the United States that has reported over 31 million coronavirus infections.
“With … a resurgence of virus cases in India and Japan, topside ambitions continue to run into walls of profit-taking,” said Stephen Innes, chief market strategist at Axi.
Businesses in Japan believed the world’s third-largest economy will experience a fourth round of coronavirus infections, with many bracing for an additional slow down in economic activity.
While Japan has had fewer COVID-19 cases when compared with other major economies, concerns about a new wave of infections are fast rising, according to responses in Reuters poll.
On Tuesday, April 20, 2020, Hong Kong will suspend all from India, Pakistan and the Philippines because of imported coronavirus infections, authorities stated in a statement released on Sunday.
India’s COVID-19 death rose by a record 1,501 to hit 177,150.
Global Markets Near Record Peaks and Will Get Stronger: deVere CEO
As the FTSE 100 hits 7,000 points for the first time since the Covid pandemic, global stock markets are poised to “get even stronger”, says the CEO of one of the world’s largest independent financial advisory and fintech organisations.
The observation from Nigel Green, the chief executive and founder of deVere Group, comes as London’s index jumped over the important threshold in early trading in London, gaining over 0.5% to 7024 points.
Mr Green notes: “London’s blue-chip index is up 40% since the worst lows of the pandemic.
“This landmark moment represents the wider optimistic sentiment gripping global markets which are near record peaks.
“We can expect global stock markets to get even stronger as investors look to seize the opportunities from economies reopening.
“They are looking towards economies rebounding in a post-pandemic era due to the monetary and fiscal stimulus, pent-up cash and demand, and strong corporate earnings.
“The current ultra-low interest rate environment and the under-performance of bonds will also act as a catalyst for stock markets.”
However, the CEO’s bullish comments also come with a warning.
“I would urge investors to proceed with caution as there are some headwinds on the horizon, including relations between the U.S. and China, the world’s two largest economies, which could be coming to a tipping point in coming weeks.
“As such, in order to capitalise on the opportunities and mitigate risks, investors must ensure proper portfolio diversification.”
Mr Green concludes: “A variety of factors are going to drive global stock markets. Investors will not want to miss out and should work with a good fund manager to judiciously top-up their portfolios.”
Refinitiv Expands Economic Data Coverage Across Africa
Building on its commitment to drive positive change through its data and insights, Refinitiv today announced the expansion of its economic data coverage of Africa. The new data set allows investment managers, central bankers, economists, and research teams to use Refinitiv Datasteam analytical data for detailed exploration of economic relationships and investment opportunities among data series covering the African continent.
Securing reliable, detailed, timely, locally sourced content has not been easy for economists who have in the past had to use international sources which often can take many months to update and opportunities to monitor the market can be missed. Because Africa is a diverse continent, economists and strategists need more timely access to country-specific data via national sources to create tailored business, policy, trading and investment strategies to meet specific goals.
Africa continues to develop critical infrastructure, telecommunications, digital technology and access to financial services for its 1.3bn people. The World Bank estimates that over 50% of African inhabitants will be under 25 by 2050. This presents substantial opportunities for investors who can spot important trends and make informed decisions based on robust and timely economic data.
Stuart Brown, Group Head of Enterprise Data Solutions, Refinitiv, said: “Africa’s growing, dynamic and fast evolving economies makes it a focal point for financial markets today and in the coming decades. As part of LSEG’s commitment to empowering the global markets with accurate and timely data, we are excited about making these unique datasets available via the Refinitiv Data Platform. Our economic data coverage of Africa will provide our customers with deeper and broader inputs for macroeconomic analyses and enable more effective investment strategies and economic research.”
Refinitiv Africa economic data coverage:
- Africa economics content comprises around 500,000 nationally sourced time series data covering 54 African nations
- Content is sourced from national statistical offices, central banks and other key national institutions
- The full breadth of economics categories in Datastream including national accounts, money and finance, prices, surveys, labor market, consumer, industry, government and external sectors
- International sources including OECD, World Bank, IMF, African Development Bank, Oxford Economics & more provide comparable data & forecasts across the continent
Refinitiv® Datastream® has global macroeconomics coverage to analyze virtually any macro environment, and better understand economic cycles to uncover trends and forecast market conditions. With over 14.2 million economic times series map trends, customers can validate ideas and identify opportunities using Refinitiv Datastream. Access its powerful charting tools, 9,000 pre-built chart templates and chart studies for commonly used valuation, performance, and technical and fundamental analysis.
Refinitiv continually grows available data – the China expansion in 2019 covered a unique combination of economic and financial indicators. Refinitiv plans to expand Southeast Asia covering Thailand, Vietnam, Philippines and Malaysia with delivery expected in 2021. This ensures that Refinitiv will have much needed emerging market economic content.
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