Rolling business and financial news, as Americas jobs rate hits the lowest since July 2008.Latest: Non-farm payroll grows by 248,000 3.27pm BST Meanwhile the founder of Uber has provided the Institute of Directors with a different take on what people like Andy Street see as Frances shortcomings, writes Katie Allen:Travis Kalanick, chief executive of the taxi app company, tells the conference Uber was born in Paris.I like to say we were founded in Paris, he says. He doesnt go near what may or may not have been tongue in cheek comments from John Lewis boss Street, but Kalanick recounts being in the French capital with his co-founder. 3.22pm BST Back with the comments on France from John Lewis managing director Andy Street. As a reminder he said, among other things, that France was sclerotic, hopeless and downbeat and said the Gare du Nord was the squalor pit of Europe.My colleague Katie Allen is at the Institute of Directors annual meeting and has been talking to its director general Simon Walker. She reports:Walker told the Guardian that Streets remarks had taken him aback a little but he sympathised with concerns about the French economy:Im a little surprised. I have a house in France and spend as much time as I can in France the wine is better, the people are stylish I even quite like Gard du Nord. 2.59pm BST Jean Claude Juncker, the EUs president designate has held lunchtime talks with Greek prime minister Antonis Samaras during his flying visit to Athens.The meeting - at the Benaki Museum in Athens - took place in a very good climate according to local media. Helena Smith reports:The visit was aimed at concentrating minds on reform efforts Greece has to make as mission chiefs representing the countrys troika of creditors at the EU, ECB and IMF, conduct a fifth review of the Greek economy with government ministers in Athens.Greek media reports said that the incoming president was also keen to discuss the post-bailout [memorandum] Greece as the country prepares to exit its 240bn international financial support programme.Over the working lunch with Samaras, Juncker focused specifically on Greeces desire to disengage from the Washington-based IMF, whose disbursement of aid instalments was originally not due to end until March 2016 (unlike euro area countries whose support for the debt-stricken nation expires this year).In a move that took many aback, Samaras announced the end of the memorandum period for Greece during talks with the German chancellor Angela Merkel last week, saying that Athens would seek to end engagement with the IMF early. The leader, who earlier this week announced he would seek a vote of confidence in his government next week, has said that it is now vital that Greece ends oversight by foreign lenders and takes ownership of its own reform/modernisation programme almost five years after seeking international aid to avoid bankruptcy. 2.52pm BST If the US non-farm payroll numbers are better than expected, then the just-released service sector for September has shown a dip from August.The services sector purchasing managers index fell to 58.9 from 59.5, but up from an earlier flash reading for September of 58.5.A slowing in the pace of service sector growth in September matched a similar easing in the pace of manufacturing output growth seen during the month, suggesting the overall pace of economic expansion dipped to the weakest since May. 2.41pm BST A US interest rate rise in the second quarter is looking increasingly unlikely, according to Rob Carnell of ING. He said:There were some elements in this release for the doves to cling on to. Wages growth, despite anecdotes of strong hiring, labour shortages and building wage pressure, slipped back to 2.0% year on year from 2.1%, on a 0.0% month on month change. This is disappointing.That said, with oil prices plunging, and headline inflation in the US likely to fall sharply in coming months, thoughts of a second quarter 2015 rate hike from the Fed are looking increasingly unlikely, so wages are less of a pivot for policy-makers than they were several months ago when CPI inflation was pushing above 2.0%. 2.24pm BST Alastair Winter, chief economist at Daniel Stewart (the boutique investment bank), says Fed chief Janet Yellen will worry that wages arent rising faster, and the other downbeat elements to the report.But that may not stop rates rising in the first half of next year.Welcome as the drop in the unemployment rate is, I very much doubt it will make much difference to the FOMC in its march towards the first rate hike in March or June 2015. The kindly Ms Yellen will wring her hands over the stubbornly high numbers of long-term unemployed, the part-timers wanting to be full-time and the discouraged workers. 2.21pm BST Marc Ostwald of ADM Investor Services, says the drop in the US jobless rate is a relief after various weaker data recently.Heres his take on the non-farm report:a solid beat at +248k vs. expected 215K, with August revised up by 38K, and July up by 31KPositives: down to 5.9% from 6.1% will be grist to the mill for the Fed hawks, but the doves will note that the Underemployment Rate at 11.8% while falling from 12.0% is still far too high, especially at this stage of the cycle, though +232K rise in Employment encouraging,though offset by fresh low on the Participation Rate at 62.7% from 62.8%soft at Flat m/m 2.0% y/y - though given that the Payrolls gains were paced by lower paid services jobs, this should not come any surprise.Hoorah the headline reading at 34.6 has finally broken the 34.5 ceiling that has been in place since 2012, though Manufacturing Hours only marginally higher - again unsurprising given Manufacturing payrolls. 2.09pm BST With Americas jobless rate now the lowest since summer 2008, there is more pressure on the Fed to normalise monetary policy.So reckons Marcus Bullus, trading director of MB Capital: After this robust number, and decent upward revisions for both July and August, the hawks will once again be circling.Policymakers will also be encouraged by the fall in the number of discouraged workers. More people are starting to believe in the economy again and that matters a lot.Anaemic wage growth continues to be the major conundrum facing markets and policymakers alike.Youd expect to see wages rising with more gusto in an improving jobs market, but this just isnt happening. 1.59pm BST These two tweets sum up the non-farm payroll:Detail of the NFP report: manufacturing's share of NFP growth falls to a new low, private service sector provides bulk of new jobs ^KB #US#NFP - also worth noting, the US Labour force participation rare falls to a 37-year low, which makes the job growth more impressive ^KB 1.53pm BST As the dollar strengthens, the gold price takes another tumble:Gold took a kick to the crotch on that #NFP print - breaking below 1200 pic.twitter.com/L3YQDGy5tM 1.53pm BST The dollar is surging, as traders calculate that the fall in the US unemployment rate will prompt the Federal Reserve to raise interest rates before too long.It has gained over a cent against the pound, to $1.6006. 1.48pm BST The initial reaction in the financial markets is that this is a strong jobs report.Triple whammy. strong jobs in Sept, Strong revision to Aug jobs & fall in unemployment rate #usjobs 1.47pm BST The other disappointment is that Americas labor force participation rate has fallen again, from 62.8% to 62.7%.That shows that more people have dropped out of the workforce altogether, which helped to drag the overall jobless rate down to 5.9% [because it measures the proportion of people who could be in work, but arent]The Participation Rate is the lowest since 1978 1.40pm BST But there is disappointment too - todays non-farm payroll shows no change in average hourly earnings in September compared with August.That suggests that the recovery isnt really feeding into Americans wage packets.Average Hourly Earnings 0.0% m/mAverage hourly wages fell a penny to $24.53, reducing the 12-month increase to 2% from 2.1%. http://t.co/Gl1Px5CK7U 1.38pm BST More good news, last months weak non-farm payroll report has been revised higher.It now shows that 180,000 new jobs were created in August, not the 142,000 first estimated. 1.32pm BST BREAKING: The US non-farm payroll shows that 248,000 new jobs were created across America last month.Thats a stronger reading than expected. 1.28pm BST Right, time for the last major piece of economic news of the week (hurrah!)The US non-farm payroll is announced in a few moments, showing how many new jobs were created in America last month.This bodes well for NFP: Claims vs. Payrolls pic.twitter.com/0JCaUiYT6p 1.19pm BST Andy Streets comments about the French economy have already caused a stink in Paris, where a deputy mayor called them false and idiotic.Our correspondent Kim Willsher reports:Jean-Louis Missika, a deputy Paris mayor in charge of economic development and the attractiveness of Paris to investors, told The Guardian that if Andy Street was joking, perhaps Paris should respond in kind.What he says is false and idiotic. As we say, everything excessive is exaggerated, but then it seems French bashing is all the fashion chez vous. 1.03pm BST John Lewiss managing director, Andy Street, has apologised unreservedly for his comments about France.The remarks I made were supposed to be lighthearted views, and tongue in cheek. On reflection I clearly went too far. I regret the comments, and apologise unreservedly. 12.54pm BST ITVs Joel Hills is reporting that John Lewiss MD has now apologised for his French gaffe:"I regret the comments and apologise unreservedly". Andy Street, boss of John Lewis, says sorry to France, in English. 12.39pm BST The bold declaration by John Lewiss MD that France was in decline and finished continues to reverberate around the media today.Over on FT Alphaville, Bryce Elder was tickled by Andy Streets description of Gare du Nord as a squalid railway station. Such a contrast with Britains own architectural heritage, eh?:re #johnlewisgate, a pic of "squalor pit" of Gare du Nord vs John Lewis in Brent Cross via @BryceElder on @ftalpha pic.twitter.com/h0bi3dnc94We can say with a degree of certainty that a rights issue, £3bn ish probably, is among the options being considered. 12.15pm BST The Institute of Directors had hoping to hear from Alex Salmond at todays annual conference. But after the Scottish first minister pulled out, organisers called in Peter Kellner, president of pollsters YouGov, to cover all things Scottish referendum. Kellner talked about the vote on Scottish independence but also had a message for the audience of business leaders. Providing some welcome context for George Osbornes earlier complaints about the rise of an anti-business movement, Kellner flagged up the dwindling reputations of those in power - be it in central government, local government or business.If they are judged by stories of zero-hours, bad pay for cleaners, bad treatment of people in China and Bangladesh... bonuses that appear unforgiveable, tax arrangements that are not ... sociable ... these play like the WMD story on reputations, Kellner warned.Kellner - there has been a decade of decline of trust of those in power #IoDACKellner - establishment parties have been in decline. Trust in politics is in decline #IoDAC 11.32am BST George Osbornes broad message to the Institute of Directors this morning is that stability and tax cuts go hand in hand.He was speaking just two days after PM David Cameron promised billions of pounds of income tax cuts if the Conservatives win the next election.Peter Kellner at #IoDAC says GE2015 might result in neither Cons or Labs having overall majority with LibDems. Tax policies w/b interesting! 11.09am BST Asked about the UK governments push for reforms in the European Union, Osborne sought to emphasise it was not an entirely selfless project.The chancellor declared:We want economic reform in Europe not just for ourselves but for the French, the Spanish [and other countries too].We do it not just for ourselves but because we want to live in a prosperous economy, he said. Free movement of people was never envisaged as freedom to move and claim benefits.Its important that we find a way through this... there are very real concerns of many members of the British public.. @The_IoD Director-General Simon Walker putting the Chancellor under pressure about David Cameron's pushback against free movement #IoDAC That issue felt like it had been resolved when the Berlin wall fell, he says. I would urge the business community not to stand on the sidelines. 10.58am BST George Osborne: "There are risks returning to the eurozone." Economic reform necessary, UK "finding allies" on EU deregulation reform #IoDAC 10.53am BST IoD DG Simon Walker & @George_Osborne discuss British business at the #IoDAC @Conservatives pic.twitter.com/dvVn5I66ml 10.49am BST Asked by an IoD member from the West Midlands about why the UK still struggled to grow exports, George Osborne said problems in the eurozone, a key market, were a short-term challenge and longer term small and medium sized businesses needed to look further afield.Very, very weak growth in the eurozone is the biggest near-term risk, he told the Annual Conference.But I am the first to say we have more work to do in this space. 10.47am BST 10.42am BST George Osborne also promised that Westminster will meet its pledge to Scotlands oil and gas industry....OS - the commitments made to Scotland will be honoured. We can do more to help oil industry #iodac pic.twitter.com/OB04piM1iqGeorge Osborne: We want to get out as many barrels of oil and...err...whatever a barrel of gas is, out of the North Sea. #IoDAC 10.39am BST The eurozone remains the biggest threat to the UK recovery, Osborne says (perhaps he was thinking of this mornings poor PMI surveys...)George Osborne: eurozone's economic problems are greatest threat to UK recovery #IoDACOsborne: 'the greatest immediate economic risk to us is the very very weak growth in the eurozone.' #IoDAC 10.34am BST George Osborne is explaining to the IoD annual conferenve how the raft of measures announced this week add up (Katie Allen writes)The chancellor lays out three points he sees as key to the partys policies.we can achieve both those things, economic stability and low taxes.@George_Osborne at the #IoDAC "We have unashamedly put business at the heart of our political message" @conservatives 10.27am BST Simon Walker, IoD director-general, is introducing George Osborne at the Institute of Directors annual conference now.Walker says the theme of this years business jamboree is game changer (reports my colleague Katie Allen from the conference). 10.25am BST Heads-up... UK chancellor George Osborne has begun speaking at the Institute of Directors Annual Convention..... Simon Walker opens the #IoDAC in conversation with @George_Osborne pic.twitter.com/lDsMdJTHj5 10.23am BST John Lewis, the retail chain, is in the spotlight this morning after its managing director described France as sclerotic, hopeless and downbeat.Andy Street urged British entrepreneurs to flee the country while theres time, declaring:If youve got investments in French businesses, get them out quickly.Friday's Times - "Tories seize poll lead after tax cut promises" #tomorrowspaperstoday #cpc14 #bbcpapers pic.twitter.com/g7gcDF8rKG 9.51am BST With a full set of survey data for Q3, we're estimating GDP growth of +0.8% for UK. For EZ, +0.25%, with France at 0.0% and Germany at 0.4%. 9.48am BST The UK services PMI report suggests that Britains economy grew by around 0.8% in the third quarter of this year, according to Markits Chris Williamson.He reckons the economy is moderating, after several strong quarters:Septembers PMI surveys suggest that the UK most likely enjoyed another spell of above-trend economic growth in the third quarter, but the recovery appears to be losing its legs.The PMI surveys are collectively signalling GDP growth of 0.8% in the third quarter, down from 0.9% in the three months to June but still strong by historical standards. However, the pace of expansion hit a six-month low in September and is showing signs of moderating further as we move towards the end of the year. 9.43am BST Here comes the UK data....and the news is that Britains dominant service sector recorded decent growth in September.But growth did slow a little, to its slowest in three months, and there are fears that the recent strong recovery is losing its legs. 9.31am BST Septembers poor PMI surveys show that eurozone economic growth in the last quarter was weak, says Chris Williamson, chief economist at Markit:The PMI suggests the eurozone economy remained stuck in a rut in the third quarter. After GDP stagnated in the second quarter, we can only expect modest growth of 0.2-0.3% in the third quarter based on these survey readings, with momentum being lost as we head into the final quarter of the year.Irelands economy is recovering strongly, Spain is seeing a still-robust upturn and the German service sector is providing an important prop to growth in the region as a whole. But the overall picture is one of a euro area economy that is struggling against multiple headwinds. These include a lack of domestic demand in many countries, subdued bank lending, sanctions with Russia and a reluctance of companies to expand in the face of an uncertain economic outlook. 9.25am BST Heres a reminder of this mornings data: 9.24am BST Europes economic woes have deepened, with private sector growth slowing to the lowest rate in 10 months.Thats the conclusions of this mornings data, and surveys earlier this week.The ongoing malaise in the eurozone economy continued at the end of the third quarter, with the latest PMI data showing a further waning of output and new order growth. Staffing levels fell at the steepest pace for 16 months in France. Job creation accelerated in Germany, but slowed in Ireland and Spain. Headcounts stabilised in Italy, following a slight decrease in August. 9.16am BST Significant Services PMI divergence between Germany,and Spain who are doing well and Italy and France who's numbers are worrying.#euro 9.06am BST Germanys service firms have defied the slowdown in France, Italy and Spain, with activity growing at a faster rate.The German services PMI rose to 55.7 in September, up from 54.9 in August, showing growth accelerated.companies expect the introduction of a national minimum wage in January 2015 to have at least some negative effect on economic growth. At least German domestic demand looks fairly resilient, so far. Services PMI revised up. 9.00am BST Frances economy has moved deeper into trouble too.Its service sector contracted in September for the first time in three months, according to Markit, dragging the wider French private sector into contraction too.Mon Dieu!There were reports from the survey panel linking job losses to company restructuring policies and, in some cases, decisions not to replace voluntary leavers. Septembers PMI data rounded off another disappointing quarter for the French private sector economy. Based on the surveys activity readings, GDP still looks to be tracking close to stagnation, continuing the stalling performance seen since the start of the year. Jobs across the private sector were cut at the sharpest rate for 16 months in September, suggesting that companies are braced for a prolonged period of weakness. 8.55am BST Pretty appalling Italy number at 48.8 v 49.6 .... frankly looks like recession persisting to year end. 8.52am BST And this is worrying too! Italys service sector suffered a deeper contraction than expected last month.Markits Italian services sector PMI fell to 48.8, down from Augusts reading of 49.8. Weakness in demand was evident as new business intakes went down another notch, which in turn pressured businesses into making further notable reductions to their charges. Manufacturers likewise reduced their output prices, suggesting broad-based deflationary forces. A halt in service sector job cuts and improved business sentiment were the relatively positive takeaways from the latest data, with the former a step in the right direction in terms of seeing demand-side trends improve. 8.46am BST Now this is worrying... growth in the Spanish service sector has slowed, and new orders grew at the lowest rate in almost a year.Spains recent revival tailed off last month, according to data firm Markit, with employment levels broadly unchanged.There were signs of a growth slowdown in the Spanish service sector at the end of Q3, particularly with regards to new business which increased at the weakest pace for almost a year. There was also disappointing news on the employment front, with the recent spell of job creation coming to an end. 8.30am BST Russias private sector only managed to post small growth last month, according to HSBCs survey of the sector.The Russian composite PMI slid to just 50.9, close to the 50-point mark showing stagnation. Firms reported falling optimism, with business expectations close to their lowest point since the financial crisis began. Overall, the Russian economy must have continued very slow growth in September amid strong and intensified cost pressures and increasing uncertainties about future business development. Such weak mechanical growth is better than the absence of growth, but we do not see drivers for stronger growth while downside risks to growth are abundant. Lower oil prices and persistent decline in fixed investment are just few of them. A mild recession remains our base case scenario for the coming quarters.HSBC Russia Services #PMI signals marginal growth: headline index at 50.5. Comp. Index at 50.9 http://t.co/7uA7Osdod4 pic.twitter.com/MYY6XKa6UA 8.20am BST Irelands recovery from the depths of its austerity slump continues, with service sector firms reporting the 26th month of consecutive growth.Panellists reported that the growth in New Business was a result of clients increased willingness to commit to new projects given signs of improvement in the Irish economy. Growth in New Export Business also accelerated during September, with the UK cited as a particular source of strength. 8.13am BST Theres gloomy news from China overnight -- its services sector has grown at the slowest pace in eight month, partly due to the weakening housing market.Official figures showed that new orders actually shrank in September, for the first time since the collapse of Lehman Brothers.Business activities in the property market have stabilized at low levels but stayed within the contractionary area, suggesting overall activities remained sluggish. 8.04am BST Good morning, and welcome to our rolling coverage of the financial markets, the world economy, business and the eurozone.After recent comments by Fed members who increasingly sound more hawkish, this weeks non-farm payrolls data will carry significant weight and go a long way towards shaping rate hike expectations. After a slump the previous month (142,000), non-farm payrolls are expected to bounce back strongly with a reading north of 200,000. Analysts feel a strong reading today could then see the Fed drop its considerable time reference as far as rates lift-off is concerned. Continue reading...
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