Pound falls as UK trade deficit swells and industrial output falls unexpectedly – business live

Britain’s trade gap widened in May, and industrial output misses forecasts after a drop in manufacturing


Assessing what that non-farm payrolls update means for US interest rates, James Knightley, chief international economist at ING says the report is “good enough” to keep the Federal Reserve on a gradual policy tightening path.

Strong jobs growth should eventually translate into higher wages, but it is taking time to do so. The Fed remains confident it will come, suggesting gradual hikes will continue, but the market continues to have doubts.

…In any case, the Fed has repeatedly used the term “transitory” to describe the slowdown in activity and subdued inflation backdrop and believe that it is only a matter of time before the tightness in the labour market translates into rising wage pressures. We agree.

Some market reaction now to that news of stronger-than-expected growth in jobs but weaker-than-forecast wage growth in the US last month.

US stock futures have extended gains but the dollar has lost ground as traders focus on the wage growth undershoot – something that will temper expectations of further rate rises from the US Federal Reserve this year.

Disappointing US #wage growth is the key takeaway. Doesn’t help the #Fed‘s quest to convince markets dip in inflation is “transitory” #NFP pic.twitter.com/py4BmuR2d0

Impressive 222K jobs number, but disappointing wage growth not budging from 2.5% 12-month change is more important.

Job growth is strong but sectoral shifts are clear:
59.1K jobs added in health care and social assistance
1K jobs added in manufacturing.

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