Aurelia Butler

Data from the U.S. Labor Department showed the unemployment rate rose by more than expected in August to 3.8% from 3.5%, its highest since February 2022. Figures showed 187,000 jobs were created last month, above expectations for an increase of 170,000. July’s figure was downwardly revised to 157,000 from 187,000. The euro gained against a softer dollar and was last up 0.2% at $1.0866.Euro zone government bond yields dropped, with the German 10-year yield falling to its lowest since August 9 at 2.446%. It was last flat at 2.47%.The STOXX 600 moved higher after the data, but stayed within the day’s range and was last up 0.2%. An index of euro zone banks fell marginally and was last down 0.14% at a session low. More

WASHINGTON (Reuters) – The U.S. economy added more jobs than expected in August, but a rise in the unemployment rate to 3.8% and moderation in wage growth pointed to an easing in labor market conditions, which could bolster expectations that the Federal Reserve will not raise interest rates this month.Nonfarm payrolls increased by 187,000 jobs last month, the Labor Department said in its closely watched employment report on Friday. Data for July was revised lower to show 157,000 jobs added instead of the previously reported 187,000. The economy needs to create roughly 100,000 jobs per month to keep up with the increase in the working age population.Economists polled by Reuters had forecast nonfarm payrolls increasing by 170,000 jobs last month. Striking Hollywood actors and the bankruptcy of a major trucking company had led economists to anticipate slower job growth in August. A tendency for the initial payrolls count to be weaker in August before being subsequently revised higher in September and October, also factored into economists’ expectations. The Labor Department’s Bureau of Labor Statistics, which compiles the employment report, had reported that there were almost 18,000 workers on strike during the period it gathered data for August’s report, including 16,000 Screen Actors Guild-American Federation of Television and Radio Artists members.Yellow (OTC:YELLQ) Corp trucking filed for Chapter 11 bankruptcy in early August, leaving about 30,000 workers unemployed. Though demand for labor is slowing, some services businesses like restaurants, bars and hotels remain desperate for workers. Job openings dropped to the lowest level in nearly 2-1/2 years in July, the government reported this week.The unemployment rate increased to 3.8% as more people entered the labor force, from 3.5% in July. It remains below the U.S. central bank’s latest median estimate of 4.1% by the fourth quarter of this year.Since March 2022, the Fed has raised its policy rate by 525 basis points to the current 5.25%-5.50% range. Before the report, financial markets were expecting the central bank to leave its benchmark overnight interest rate unchanged at its Sept. 19-20 policy meeting, according to the CME Group’s (NASDAQ:CME) FedWatch Tool.With the labor market loosening, wage growth slowed somewhat. Average hourly earnings rose 0.2% after increasing 0.4% in July. In the 12 months through August, wages advanced 4.3% after increasing 4.4% in July. More

Economic stabilisation is a top challenge for the South Asian nation as it embarks on a narrow recovery path after a $3 billion bailout from the International Monetary Fund (IMF) averted a sovereign debt default. Economic reforms have already fuelled record inflation and interest rates, and all-time lows for the rupee.Pakistan raised petrol and diesel prices to a record high on Friday, with petrol prices rising 14.9 rupees to 305.4 rupees; and diesel prices rising 18.4 rupees to 311.8 rupees. In June, the Consumer Price Index (CPI) rise was 28.3% year-on-year, coming off a record 38% in May. More

ISTAT’s preliminary estimate issued on July 31 had pointed to a 0.3% drop in gross domestic product, against analysts’ forecasts of a flat reading.On a year-on-year basis, second-quarter GDP growth was lowered to show a 0.4% increase, compared with the 0.6% printout in the flash estimate.The downward revision casts a shadow over prospects for the full year, as Prime Minister Giorgia Meloni’s right-wing government prepares to draw up its 2024 budget.Italian ministers have repeatedly criticised the European Central Bank for sharply raising interest rates, saying its policy threatens to throw the euro zone into recession.Rome is officially forecasting full-year 2023 growth of 1.0%, slowing sharply from the buoyant 3.7% rate in 2022.Until a few weeks ago the government was describing the 2023 forecast as conservative, with Economy Minister Giancarlo Giorgetti saying he hoped for growth of between 1.2% and 1.4%. Italian think tank Prometeia said it did not think that growth would exceed 1% over the year.”The Italian economy is going through a phase of substantial stagnation, but we still do not foresee a full-blown recession,” it said, noting that Italy was not immune to a global slowdown and the effects of higher inflation and borrowing costs.BLEAK BREAKDOWNThe breakdown of GDP components showed investments and government spending contracted sharply in the second quarter compared with the previous three months, while consumer spending stagnated.Imports and exports both declined by 0.4%, meaning trade flows made a zero contribution to growth. The sharp reversal in the second quarter came after a strong start to the year for what has been the euro zone’s most sluggish economy since the launch of the single currency.The first-quarter GDP gains were unrevised at 0.6% quarter-on-quarter and 2.0% year-on-year.ISTAT said so-called “acquired growth” at the end of the second quarter stood at 0.7%, meaning that if GDP is flat quarter-on-quarter for the rest of the year, full-year growth will come in at 0.7% compared with 2022. More

TOKYO (Reuters) -Japan’s economic output ran above full capacity in April-June for the first time in nearly four years, a government estimate showed, suggesting that conditions for ending its policy of ultra-low interest rates could be falling into place.The output gap, which measures the difference between an economy’s actual and potential output, grew 0.4% to mark the first increase in 15 quarters, according to Friday’s estimate.Prime Minister Fumio Kishida said the data was significance but added that the margin of increase remained small and that whether the trend could be maintained was key.”We are at a critical stage as to whether the economy can overcome the pandemic and move to a new stage,” he told reporters. “I want to accelerate consideration of a new economic package.”A positive output gap, along with wage growth and price expectations, are among factors that Japan’s central bank has identified as inflation drivers.The removal of Japan’s anti-virus curbs and the spending of savings accumulated during the crisis have helped underpin a rise in consumer demand, which typically puts upward pressure on prices.Ryosuke Katagi, economist at Mizuho Securities, said things were “moving in the right direction”, though the output gap data lacked strength.”It will still take time for the government to declare an end of deflation, and for the Bank of Japan to exit its massive monetary stimulus,” he said. More