Overseas Headlines – June 02, 2017

U.S.:

U.S. job growth slows; unemployment rate drops to 4.3 percent

U.S. job growth slowed in May and employment gains in the prior two months were not as strong as previously reported, suggesting the labour market was losing momentum despite the unemployment rate falling to a 16-year low of 4.3 percent. Nonfarm payrolls increased 138,000 last month as the manufacturing, government and retail sectors lost jobs, the Labour Department said on Friday. The economy created 66,000 fewer jobs than previously reported in March and April. May’s job gains marked a sharp deceleration from the 181,000 monthly average over the past 12 months. Job growth is slowing as the labour market nears full employment. Last month’s job gains could still be sufficient for the Federal Reserve to raise interest rates this month. “The weak job growth number isn’t a disaster because it still keeps up with population growth,” said Paul Diggle, senior economist at Aberdeen Asset Management. “Today’s numbers probably won’t stop the Fed from raising rates this month. But they might well influence what happens next.” The economy needs to create 75,000 to 100,000 jobs per month to keep up with growth in the working-age population.

http://www.reuters.com/article/us-usa-economy-idUSKBN18T0BT

 

Europe:

Euro zone manufacturing surges in May as new orders mount up

Manufacturing across the euro zone grew at the fastest rate in more than six years during May, increasing activity as price increases failed to slow their new orders, a survey showed on Thursday. Signs the bloc’s economy is enjoying a stable and broad-based recovery, alongside inflationary pressures, will be welcomed by policymakers at the European Central Bank. IHS Markit’s Manufacturing Purchasing Managers’ Index for the euro zone rose to 57.0 in May, up from April’s 56.7 and its highest level since April 2011. The figure matched a preliminary reading. An index measuring output, which feeds into a composite PMI due next week, also climbed further above the 50 mark that separates growth from contraction. It reached 58.3, its highest in more than six years high, up from April’s 57.9. “The euro zone upturn is developing deeper roots as factories enjoy a spring growth spurt,” said Chris Williamson, chief business economist at IHS Markit. “Demand for goods is growing at the steepest rate for six years, encouraging manufacturers to step up production and take on extra staff at a rate not previously seen in the two-decade history of the PMI survey.” A new-orders sub-index nudged up to 57.8 from 57.7, its highest since March 2011. The upturn came even though companies raised prices last month, albeit not as sharply as they did in April.

http://www.reuters.com/article/us-eurozone-economy-pmi-idUSKBN18S474

 

South America:

Brazil exits recession with fastest growth rate since 2013

Brazil’s economy emerged from its worst recession on record with its fastest growth rate in nearly four years, data showed on Thursday, boosting President Michel Temer’s case for staying in office as he battles a corruption scandal. Brazil’s gross domestic product (GDP) grew 1.0 percent in the first quarter from the preceding one, matching economists’ forecasts for the biggest rise since the second quarter of 2013. Growth is unlikely to stay as strong in the second quarter, economists said, as the first-quarter performance was driven up by extraordinary harvests of corn and soy and by a strong buildup in inventories across the economy. Yet Temer, who has resisted protests for his resignation after being placed under investigation by the Supreme Court, tweeted minutes after the release: “The recession is over!” “It’s the result of the measures we are taking. Brazil is growing again and will grow even more with the reforms,” he went on. He was referring to a legislative agenda seen as crucial for balancing the budget but which got stuck in Congress as his allies debated whether to break ranks with the government.

http://www.reuters.com/article/us-brazil-economy-gdp-idUSKBN18S5HH

2017-06-10T17:04:15+00:00