US jobs rise 4.8mn in June

According to last the non-farm payroll report last week, the US added 4.8mn new jobs in June, exceeding expectations of 3.2mn.

By Daniel Richards

According to last week’s non-farm payroll report, the US added 4.8mn new jobs in June, exceeding expectations of 3.2mn. Unemployment fell from 13.3% in May to 11.1%, and markets rallied. However, over 20mn jobs were lost in April, and with new coronavirus cases declining in only one state (Vermont) last week, there remain significant threats to the US recovery. Many sectors and firms continue to struggle, as evidenced by the 1.4mn new initial jobless claims filed last week.

In other positive indications of a recovery, the Caixin services PMI for China indicated a surge in activity in June, as the index climbed from 55 in May to 58.4. June’s result far exceeded expectations of 53.2, and was the highest reading since August 2010.

The UAE unveiled a more slimline government on Sunday, after the Prime Minister first announced plans to restructure the government in May. Around half of federal agencies have been merged and many government service centres will be closed and replaced with digital platforms over the next two years. Key changes include the merging of the Ministries of Energy and Infrastructure under Suhail Al Mazrouei, and the appointment of ADNOC CEO Sultan Al Jaber as Minister of Industry and Advanced Technology, in addition to his role at ADNOC. The Economy Ministry has also been restructured under Abdullah Al Marri with new ministers of state for entrepreneurship & SMEs, and foreign trade. The government restructure should help to reduce costs as well improve efficiency and allow the government to be more agile in responding to new challenges.

CPI inflation in Turkey rose to 12.6% in June, exceeding expectations of 12.0%. This was up from 11.4% in May, and was the highest level since last August. The central bank surprised by keeping rates on hold for the first time in 10 meetings last month, and with price growth ticking higher we may have seen the limits of the rate-cutting cycle reached.