U.S. Adds 261,000 Jobs as Storm Effects Reverse; Wages Stall
U.S. employers added the most workers in a year, rebounding from September’s slowdown, as people resumed work after hurricanes Harvey and Irma, Labor Department figures showed Friday. The jobless rate fell to the lowest since 2000 while wages stalled. The report indicates the fallout from the hurricanes, which had depressed the labor market the prior month, largely dissipated in October. Jobs bounced back at restaurants and bars, which added 89,000 workers after a 98,000 drop in September. Weather-related distortions may make it hard to read too much into the data until the end of the year. Still, economists expect a return to the underlying trend of steady, albeit slower, hiring that’s still enough to keep pushing down the unemployment rate.
U.S. Trade Deficit Widens as Import Gain Barely Exceeds Exports
The U.S. trade deficit widened in September as a pickup in imports barely outpaced a gain in exports that reflected a jump in petroleum shipments, Commerce Department data showed Friday. The gain in exports reflected more shipments of energy-related materials as ports affected by Hurricane Harvey reopened. American shipments to overseas customers have received a boost this year from improving global demand and a weaker dollar, which has made U.S. goods cheaper for overseas consumers. Meanwhile, the pickup in imports spanned all major categories except motor vehicles, with shipments of capital goods and industrial supplies both indicating robust domestic demand. The September figures cap a quarter that saw an improvement in the U.S. trade balance. Trade contributed 0.41 percentage point to economic growth in the third quarter, the most since the final three months of 2013. Gross domestic product increased at a 3 percent annualized rate during the period.
Bank of England’s Broadbent: rate signal is no promise
The Bank of England’s signal that it may need to raise interest rates two more times to get inflation back toward the central bank’s target is not a promise, Bank of England Deputy Governor Ben Broadbent said on Friday. “Given all the other things we assume in our forecasts, many of which will be misses…, we anticipate we will need maybe a couple more rate rises to get inflation back on track while at the same time supporting the economy,” Broadbent told BBC radio. “That is not a promise, and it never could be a promise. And that is not what the governor said yesterday either.” Broadbent was responding to a question about the BoE’s previous attempts to signal the likely path for interest rates which were knocked off course by twists and turns in the economy.
China central bank liquidity injection eases pressure on money rates
China’s primary money rates eased on Friday after the central bank injected medium-term loans into the financial system, as policy makers carried out a delicate balancing act between easing liquidity stress in the system and discouraging riskier lending. That strategy appears to be working even though analysts expect further tightening in cash conditions toward mid-month when businesses start making tax payments. The People’s Bank of China (PBOC) injected 404 billion yuan ($61.05 billion) in medium-term loans earlier in the day, slightly exceeding the total amount of such loans maturing in November, helping to loosen money market conditions. The volume-weighted average rate of the benchmark seven-day repo CN7DRP=CFXS traded in the interbank market, considered the best indicator of general liquidity in China, was 2.7211 percent on Friday morning, 12.26 basis points lower than the previous day’s closing average rate.