US Labor Data Fuel Rate Rise Expectations

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A positive set of U.S. jobs numbers eased some fears of a slowdown in the world’s largest economy.

More than expected, 528,000 jobs were created in July, against 398,000 the previous month, the unemployment rate falling from 3.6% to 3.5%, the lowest level since the start of the pandemic.

Today’s figures follow last week’s GDP data showing the economy contracted for the second quarter in a row, raising concerns the US was heading into recession – a status no confirmed yet – although the government maintains it is still in good shape. Federal Reserve Chairman Jay Powell has warned against placing too much emphasis on the GDP reading, saying interest rates could rise further without triggering a recession.

Separate data yesterday showed the number of people applying for unemployment benefits last week hit 260,000, the highest in more than six months, suggesting the labor market was starting to cool.

Several major companies recently announced they were cutting jobs, including retail giant Walmart, brokerage Robinhood, media companies Netflix and Twitter, and electric car maker Tesla. Technology groups Meta and Google-parent Alphabet announced a slowdown in hiring.

US government bonds and equity futures sold off after more positive news today as traders bet on the Fed continuing its aggressive run of interest rate hikes.

“The unexpected acceleration in nonfarm payroll growth in July, along with the continued decline in the unemployment rate and the resumption of wage pressure, make a mockery of claims that the economy is on the brink of collapse. recession,” Michael said. Pearce, senior US economist at Capital Economics. “All the details [of the report] appear to support continued aggressive rate hikes by the Fed.

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Need to know: the economy

Europe and Asia fight to secure gas suppliesrisking a further spike in prices that could intensify the cost of living pressure on consumers.

bank of england Governor Andrew Bailey defended his strategy after the central bank raised interest rates by 0.5 percentage points to 1.75% yesterday, the highest level since the global financial crisis. The BoE said the country would enter a prolonged recession later this year, with inflation reaching 13% by the end of the year. He faced criticism from Prime Minister hopeful Liz Truss and the FT editorial board, who said he needed to be more forceful.

Latest for UK and Europe

Fuel poverty in the UK campaigners denounced regulator Ofgem’s decision to change the energy price cap every three months instead of twice a year. At the same time, data on the incomes of low-income households highlighted the country’s low level of social mobility. Crooks who had exploited the fears of victims of coronavirus are now attacking those affected by the cost of living crisis.

Number of British companies in “critical financial distress” has increased by more than a third over the past year. British built activity fell for the first time since the start of last year as rising inflation and interest rates took their toll.

Ukraine called for the easing of Russia’s blockade on its grain exports to be extended to other products such as metals.

A survey by the European Central Bank showed euro area consumers increasingly bleak, with forecasts that inflation will remain above 2% over the next three years and the economy will contract by 1.3% over the next 12 months.

Latest World

Rising tensions across the Taiwan Strait highlighted the risks to global supply chains as cargo ships and airlines are disrupted by Chinese military exercises. The strait is the main shipping route between China and Japan, the world’s second and third largest economies, as well as transporting manufactured goods from Asian factories to world markets.

India raised its key interest rate by half a percentage point to 5.4% in an attempt to curb the rise in inflation, which currently stands at 7%.

Sergio Massa, the third person to take charge of Argentina’s economy in just a month, has pledged to restore fiscal order and regain market confidence through a new “super ministry”. His first steps include ending money printing to fund the budget, building up dollar reserves, and “redesigning” state subsidies.

The recent Japanese invention of heat stroke insurancewhile attracting attention as a business innovation, tells a disturbing story about the status of the country’s ‘retirees’, writes Asia editor Leo Lewis.

A review in the Reserve Bank of AustraliaManaging through soaring inflation is being watched closely by central bankers around the world who are accused of policy and communication failures.

Need to know: business

The recent troubles in Financial markets was reflected in lower profits and slower new business at UK investment platform Hargreaves Lansdown and outflows from Pimco, the world’s largest credit-focused fund manager.

Lufthansa said demand from wealthy passengers would bring “significantly higher” profits in subsequent quarters, despite the current state of industry chaos.

Benefits to glencore, one of the big winners from the turmoil in commodity markets, more than doubled in the first half of the year. Coal accounted for nearly half of its record $18.9 billion in adjusted earnings.

Bayerthe German drugs and chemicals group, doubled its growth forecast for 2022 after rising food prices boosted demand for seeds and weedkillers.

Benefits to Toyota, the world’s largest automaker, nearly halved to 579 billion yen ($4.3 billion) in the second quarter on the back of rising costs and pandemic shutdowns in China. Meanwhile, Rolls Royce warned of the effects of rising inflation and supply chain issues.

UK retail leader Next raised its full-year profit forecast after warm weather boosted store sales in the first half. There is also hope on the horizon for online retail. Innovation editor John Thornhill reviews an Indian e-commerce network enabling millions of small merchants to connect with suppliers, customers and delivery companies to compete with Amazon.

American media companies have been hit with a “perfect storm” of trouble, causing them to lose nearly $400 billion in market value this year. Discovery of Warner Bros. said the era of “spend, spend, spend” streaming was over as it reported a quarterly loss of $3.4 billion. Advertising demand remains strong, according to WPPthe largest advertising group in the world, even if its investors have not been convinced.

FCBarcelona was previously declared “clinically dead” by its president after years of high spending on players coupled with the forced closure of its stadium during the pandemic. Sportswriter Josh Noble wonders if a new spending craze will help him reclaim his past glories or just rack up more financial trouble for the future.

Scientific report

covid-19 infections in the UK, although still at high levels, fell for the second consecutive week, fueling hopes that the latest wave – driven by the BA.5 variant – has peaked.

The United States is focused on monkey pox after yesterday declaring the outbreak a public health emergency and appointing a new team to improve access to tests, vaccines and treatments. The country accounts for around a quarter of the 22,100 global infections of the virus, which is spread through skin-to-skin contact and is typically found in West and Central Africa.

Two reports cast doubt on the UK’s aim to become a “scientific superpowerwithout a better focus on results and more spending on research and development. Lack of laboratory space is also threatening the growth of life sciences at Oxford and Cambridge.

The American President Joe BidenCovid’s positive Covid test just three days after it was announced to be negative has shed light on ‘rebound’ cases of patients who were prescribed Paxlovid, which has been hailed for preventing some of Covid’s worst effects in elderly patients or patients with pre-existing conditions.

Japan is grappling with its biggest coronavirus outbreak since the pandemic began, fueled by children and teenagers who have not been fully vaccinated.

Get the latest global picture with our vaccine tracker

Some good news

The tram is back! Dozens of cities across Europe are reintroducing trams, easing congestion and pollution, as well as reclaiming urban centers in a new golden age of public transport. (Reasons to be happy)

Have you spotted any good news you’d like to share with FT readers? Comment below or email us at [email protected].