Market overview: FTSE 100 finishes lower after non-farm payrolls
1630 (close): The FTSE 100 ended the day down 2.44% to 6,042.92 points after a worse-than-expected US non-farm payrolls report. American employers added 173,000 jobs in August following an upwardly revised 245,000 in July, data released on Friday by the Labor Department showed. The figure was the smallest gain in five months and fell way short of the 215,000 figure analysts had expected. However, the unemployment rate fell to 5.1% from 5.3% to reach its lowest level since April 2008, while employment gains for July and June were revised up by a combined 44,000. “August’s employment report is fairly mixed and can be used to make a case for or against a rate hike at the upcoming FOMC meeting,” said Capital Economics. “As far as we’re concerned, the September meeting is a 50-50 toss up."
1553: Via his Twitter account Mohammed El Erian said the report puts the Federal Reserve in complex uncertainty jam as below-expectation job craetion offset by several other positive factors. Wall Street is reacting very negatively, with the Dow Jones Industrials now off by 1.42% and the S&P 500 down by another 1.24%. FTSE 100 down 123.86 points to reach 6,070.24.
1548: Following today's jobs report, Richmond Fed president Jeffrey Lacker described it as a “a pretty much right down the middle of the fairway sort of employment report.” That's "good" he added, according to The Wall Street Journal.
1331: Some analysts are pointing out the fact that the previous two months tally for US non-farm payrolls were revised higher by a combined 44,000, in effect putting the data in-line with the market consensus. Furthermore, average hourly earnings increased by more than had been expected, at a 0.3% month-on-month rate of gain. Also, "the Fed just achieved the full-employment part of its dual mandate," Capital Economics adds. As far as we're concerned, the September meeting is a 50-50 toss-up, the think tank adds.
1330: The US economy added 173,000 jobs in August, data released by the Labor Department showed. The figure was the smallest gain in five months and fell way short of the 215,000 figure analysts had expected. The unemployment rate fell to 5.1% from 5.3% to reach its lowest level since April 2008, while employment gains for July and June were revised up by a combined 44,000.
1330: Three-month copper futures were down 1.5% to reach $5,147.50 per metric tonne on the LME.
1116: British new car registrations surged in August, as buyers were buoyed by new financing deals, an industry body said on Friday. The Society of Motor Manufacturers and Traders said new car registrations jumped 9.6% year-on-year last month to 79,060 units, after growing 3.2% in July and 12.9% in June.
1003: Germany’s construction growth expanded at the lowest pace in seven months. According to the latest Markit Purchasing Managers’ Index (PMI), the construction sector in the Eurozone’s largest economy grew at a very sedate pace, even though companies added to their payrolls and increased buying activity.The seasonally adjusted index fell from 50.6 in July to 50.3 last month, the lowest level since January.
0946: UK retail sales in August were the weakest since the financial crisis, with a BDO survey showing a massive 4.3% drop compared to the same month last year. BDO's research found that most parts of the high street suffered as the summer rains swept in, with sales of fashion falling 5.5%, homewares knocked 3.3% lower and lifestyle goods down 1.3% year-on-year.
0930: Eurozone retail sales activity expanded at a slower pace in August, Markit reveals. The purchasing mangers' index fell to 51.4 last month from 54.2 in July. However, it was above the 50 level that separates expansion from contraction.
0900: London stocks are in the red ahead of the US non-farm payrolls report which may provide hints on the timing of the first interest rate increase. The Federal Reserve is looking for signs of improvement in the labour market before raising interest rates so healthy figures will likely fuel speculation that such a move is on the cards as soon as this month.