Jobs Day in America

April 5, 2019

The dollar marked time overnight as investors await today’s release of U.S. March labor market data. The dollar slipped 0.2% against the euro but moved even less on balance against other key currencies. The price of gold, $1,294.10 per ounce, also is unchanged from Thursday’s close.

U.S. employment growth in the prior two months was all over the map due to weather distortions, climbing 311K in January but just 20K in February. Average hourly earnings has at last established a beachhead above 3.0%, with on-year advances of 3.3% in December, 3.2% in January and 3.4% in February, but inflation has remained subdued.

Ten-year sovereign debt yields firmed four basis points in the U.K., 2 bps each in Germany and the United States, and 1 basis point in Japan. WTI oil has eased 0.2% to trade just under $62 per barrel.

In stock market action, share prices fell 0.8% in Australia, 0.5% in New Zealand, and 0.3% in Indonesia but rose 0.5% in India, 0.4% in Japan, and 0.2% in Singapore. Markets in China, Hong Kong and Taiwan were shut for the Ching Ming Festival. European stocks, like those in the Pacific Rim, are trading mixed with drops of 0.5% in Spain and 0.4% in Switzerland, no change in the German Dax and upticks of 0.3% in the British Footsie and 0.2% in the Paris Cac.

A 0.7% advance in German industrial production in February surprised slightly on the upside because of a 6.8% leap in construction activity. Factory output remained soft with a 0.2% month-on-month dip. Industrial production was 0.4% lower than a year earlier but 0.4% higher in January-February combined relative to the fourth quarter 2018 average level.

Japan’s index of leading economic indicators recovered to a 2-month high in February. So did the index of coincident economic indicators, but officials kept a trend designation on the COI of “signaling a possible turning point” for a second straight month. The trend had shifted from “improving” to “weakening” in the final third of 2018.

Nominal labor cash earnings in Japan posted a 0.8% on-year decline in February, the most since mid-2015. Real labor cash earnings were 1.1% below their year-earlier level. Finally, real household spending growth of 1.7% in February from a year before was down from 2.0% in January and a touch less also than had been forecast.

British Prime Minister May and her EU colleagues are at loggerheads over whether and for how long the U.K. is to be granted another delay on its day to leave that group. Currently, that’s supposed to happen a week from today, and EU officials want the extension to be a whole year in length if it is allowed at all.

Britain’s Halifax house price index slumped 1.6% on month in March, but the 12-month increase rose to a 7-month high of 3.2%. British unit labor cost inflation accelerated 0.2 percentage points to 3.1% in the final quarter of 2018.

Spanish industrial production fell 1.1% on month in February — the third decline in four months — and was 0.3% less than a year earlier.

Norwegian industrial production dropped on month for a fourth straight time in February. The decline of 1.8% left output 5.7% lower than a year earlier.

Danish industrial production dipped 0.3% on month but rose 3.6% on year in February.

Hungarian industrial production rose 1.0% on month and 5.9% from February 2018, its largest 12-month increase in four months.

A 9.5% year-on-year rise in Romanian retail sales in February was the largest such increase in 13 months. Czech retail sales were 5.1% greater that month than a year earlier, most in 3 months.

The French current account deficit in February of EUR 778 million followed small surpluses in both December and January and a EUR 1.3 billion deficit in November.

Consumer confidence in Indonesia slipped to a 4-month low in March and was 2% below its end-2018 level.

Like the United States, Canada will be reporting March labor market statistics shortly.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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