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The Guardian - UK
The Guardian - UK
Business
Graeme Wearden (until 2.15) and Nick Fletcher

US economy created 227,000 new jobs in January, as jobless rate rises to 4.8% -as it happened

The White House in Washington DC
The White House in Washington DC Photograph: Saul Loeb/Getty Images/AFP Creative

European markets end the week on a high note

Financial shares were boosted by the prospect of Donald Trump rowing back on regulation, while a rise in the oil price after new US sanctions on Iran lifted energy stocks. So markets moved sharply higher, with the FTSE 100 recording its best one day rise so far this year. Even a fall in mining shares as China raised interest rates could not undermine the positive mood.

Better than expected US jobs figures also gave some support, pushing Wall Street higher and the Dow Jones Industrial Average back through the 20,000 level. The final scores in Europe showed:

  • The FTSE 100 finished up 47.55 points or 0.67% at 7188.30
  • Germany’s Dax rose 0.2% to 11,651.49
  • France’s Cac closed up 0.65% at 4825.42
  • Italy’s FTSE MIB was 1.2% higher at 19,116.04
  • Spain’s Ibex ended up 0.6% at 9462.7
  • In Greece, the Athens market added 0.94% to 628.92

On Wall Street, the Dow Jones Industrial Average is currently up 0.9% at 20,062, above the 20,000 barrier for the first time all week.

On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back on Monday.

President Trump’s action on financial regulation is imminent it seems:

Oil prices are higher as the US unveiled a number of new sanctions on various companies and individuals following a recent missile test. Reuters reports:

The United States on Friday sanctioned 13 individuals and 12 entities under its Iran sanctions authority, days after the White House put Tehran “on notice” over a ballistic missile test and other activities.

In a statement on its website, the U.S. Treasury listed the sanctioned individuals and entities, some of which are based in the United Arab Emirates, Lebanon and China.

The move is the first against Iran since U.S. President Donald Trump took office on Jan. 20. The sanctions were similar to actions taken by the Obama administration targeting Iran’s ballistic missile network.

The new designations stuck to areas that remain under sanctions even with the 2015 nuclear deal in place, such as the Islamic Revolutionary Guards Corps (IRGC) and Iran’s ballistic missile program.

“Today’s action is part of Treasury’s ongoing efforts to counterIranian malign activity abroad that is outside the scope of the JCPOA,” Treasury said, a reference to the nuclear deal between Iran and world powers.

Among those sanctioned on Friday were companies, individuals, and brokers the U.S. Treasury said support a trade network run by an Iranian businessman, Abdollah Asgharzadeh.

The news has seen Brent crude and West Texas Intermediate climb around 1%.

There is a fine line to tread when making changes to Dodd-Franks, said Jasper Lawler, senior market analyst at London Capital Group:

Reports that Donald Trump is preparing to scale back financial regulations in the US is a boon for multinational ‘megabanks’ which have seen profits drop since the heady days before the 2008 financial crisis.

Shares of Visa, Goldman Sachs and JP Morgan were all atop the US benchmark. There was observable shareholder glee that an era of ever-expanding regulation could be coming to an end under Donald Trump.

Since Dodd Frank was introduced, banks have devoted a lot more capital towards compliance and have had to decrease leverage, both of which are a direct hit to profitability. If Dodd Frank is watered down, that’s a direct boost to the bottom line for banks.

The changes to Dodd Frank are likely to be small to begin with but Trump is shifting the direction of travel from more regulation to less regulation. That’s a good thing for the financial sector, and less red tape is good for corporate America as a whole. Trump turning his attention to deregulation could be just the boost Wall Street needs to send the Dow back above the 20,000 mark.

Too much regulation favours the large institutions who can afford the extra compliance costs.

Unwinding some of Dodd Frank is a good thing because it will enable smaller community banks to compete, offering competition to consumers.

Repealing too much of Dodd Frank puts the entire system at risk of a repeat of 2008. The red line is the Volker rule; if the big banks can engage in proprietary trading, then depositors will be put at much greater risk.

President Trump is meeting with business leaders and it appears the plans for the financial sector are on the agenda:

Unlike the Markit survey, another report on the services sector has come in below expectations, although still showing a strong performance.

The ISM non-manufactuing PMI was 56.5 in January, virtually flat on the 56.6 recorded the previous month and slightly below expectations of a figure of 57.

Meanwhile factory orders in December rose by 1.3% compared to estimates of a 1% increase, and a 2.3% fall in November.

Updated

Back with the Dow, and it is clear that the financial sector is on the rise thanks to the idea that Donald Trump will row back on regulation:

Dow risers and fallers
Dow risers and fallers Photograph: Thomson Reuters
Sector moves
Sector moves Photograph: Thomson Reuters

US service sector beats expectations

The first of two surveys of the US service sector has shown a better than expected performance last month.

The Markit service sector PMI for January came in at 55.6 compared to an initial estimate of 55.1 and December’s figure of 53.9. This was the highest reading since November 2015.

US services PMI
US services PMI Photograph: IHS Markit

The Markit Composite index, which includes services and manufacturing, was 55.8, up from 54.1 in December. Chris Williamson, chief business economist at IHS Markit said:

The US economy has started 2017 on the front foot. Business activity across the economy is growing at the fastest rate for over a year and optimism about the business outlook has risen to the highest for a year and a half.

The January surveys signal annualized GDP growth of approximately 2.5%, setting the scene for a solid first quarter. With January seeing the largest inflow of new business for 18 months, there’s good reason to believe that firms will be even busier in coming months.

Even more encouraging is the ongoing impressive rate of job creation, with the January PMI numbers comparable to around 200,000 jobs being added.

A waning of price pressures takes some heat off the Fed, though the sustained strong output and jobs growth signalled by the surveys will fuel speculation that the next rate hike will be sooner rather than later, with June looking most likely.

Wall Street opens higher

US markers are on the rise after the better than expected headline jobs figure, with financial companies also benefitting from the prospect of looser regulation if Donald Trump scraps the Dodd-Frank legislation.

The Dow Jones Industrial Average is currently up 96 points or 0.48% while the S&P 500 opened 0.4% higher and the Nasdaq Composite 0.26% better.

Updated

The mixed picture from the non-farm figures - positive jobs numbers, weaker than expected wages growth - also saw some volatility in the currency markets as traders tried to work out the implications for US interest rates. Kathleen Brooks, research director at City Index, said:

The dollar initially reacted positively, however, within minutes the dollar index backed off highs as the foreign exchange market took stock of some of the weaker elements of the report. US stock market futures moved higher and are predicting a stronger open for the Dow, S&P and Nasdaq. However, the bond market was less impressed, and US treasury yields fell across the curve, the two-year yield is currently down 5 basis points, which could weigh on the buck further on Friday.

We don’t think that today’s non-farm payrolls report, on its own, will be a game changer for the Fed, and the market is still pricing in the prospect of another rate hike from the Fed by mid-year; after all wage growth at 2.5% is still above the Fed’s target inflation rate. However, we will be watching the development of wages, which are a key metric for the Federal Reserve going forward. If they don’t pick up again for February then Federal Reserve rate hike expectations may start to get pushed further out to the second half of 2017, which could limit dollar upside in the medium term.

The yield, or interest rate, on US government bonds has fallen since the jobs report came out.

Traders are betting that the weak wage growth last month means the Fed is even less likely to raise interest rates in March.

US jobs report: What the experts say

Wall Street and City economists broadly agree that today’s US jobs report shows America’s economy remains robust, although the mediocre wage growth is a disappointment.

Andrew Hunter of Capital Economics:

The 227,000 rise in non-farm payrolls in January suggests that the labour market started the year on a reasonably solid footing. However, the drop back in annual wage growth is another reason to think the Fed will hold off raising interest rates until June.

Kully Samra, Charles Schwab U.K. Managing Director:

“Today’s jobs numbers coupled with most other economic data points this week demonstrate the ongoing resilience and strength of the US economy.

The figures also corroborate the findings of the Atlanta Fed Wage Growth Tracker, which has generally continued on an upward trend over the last quarter. This is a further indicator of both momentum in the wider domestic economy and that a tighter job market is boosting job security and overall pay.

“Weekly jobless claims remain near a multi-decade low and appear healthy enough to keep the low unemployment rate intact. A strong job market, inflection points in the wider economic data and corporate earnings, alongside increased consumer and business confidence, should be a cause for optimism amongst investors in US equities.”

Naeem Aslam of Think Markets:

The US NFP data has confirmed that the lavish party in the employment sector is still somewhat solid, especially if you look at the headline number. You can say that it was a super solid number because it was well ahead of expectations. This week we had a number disappointing news with respect to what traders were expecting, for instance, the Bank of England’s event.

It is not all good news when it comes to the US jobs number because if you peel the layers, it shows that the downside surprise is in the wage report and a lot of disappointment there. We still need to see more readings before we can see that there is a trend because this number is full with noise.

There is no doubt that the hourly wage growth has gathered the most momentum recently and fuelled this concern among traders that the Fed is behind the curve, while inflation is picking up steam. Clearly, today’s number has put cold water on that. Moreover, if you are interested in a rate hike, then clearly you need to know that the Fed cannot move until they have a clear idea what the fiscal spending will be and that is the reality which market needs to digest.

Justin Wolfers of University of Michigan.

Tanweer Akram of Thrivent

Continued improvement in the labor market in the U.S. strengthens the case of the Fed remaining on course to gradually tighten monetary policy in the coming months. Even though last month’s job growth was strong, the FOMC will be cautious in tightening monetary policy because of considerable uncertainty about economic policy and global conditions.

A key challenge for the new administration will be to lift growth in both workers’ compensation and labor productivity. Infrastructure spending, lower taxes, business friendly attitude, and more streamlined regulations would be beneficial to the economy. However, higher tariffs, restrictive immigration policies, protectionism, lack of action on global climate change, and various erratic policies would be harmful.

Richard de Meo, Managing Director of Foenix Partners.

Today’s Non Farms print was as strong as last month’s was disappointing, yet the reflex dollar rally was quickly given back as traders cast their eyes through the detail of an underwhelming overall jobs report.

Seasonal challenges relating to January data should be taken into account, yet the fall in average earnings to 0.1% and a rise in the unemployment rate to 4.8% might cause a slight stir across the FOMC, who just this week expressed their comfort with the labour sector. A binary assessment of upcoming Fed decisions would point to a minimal but negative impact to rate expectations, yet the stronger message to emerge is that US businesses confidence is on the rise and, in the process, already helping Trump towards his 4% GDP target.

I’ve grabbed some nice charts off Bloomberg TV, showing how today’s jobs report compared to Wall Street’s forecasts....

The jobs report

...and also showing how wage growth dipped:

The jobs report

Here’s our US business editor, Dominic Rushe, on today’s jobs report:

The US added 227,000 new jobs in January, the last month of the Obama presidency and the first of Donald Trump’s, the Department of Labor announced on Friday.

The closely watched figure was the best since last June and comes after Trump won the election promising jobs growth and pushing US companies to employ American citizens, threatening to tax imports of goods made outside US borders.

However, the report also highlights the struggle ahead for Trump and underlines Obama’s record on job creation. January marked the 76th consecutive month of job gains, the best on record. And the unemployment rate, at 4.8%, is in line with the Federal Reserve’s estimate for a normal job market.

Trump was a harsh critic of the government’s monthly job’s report during the election campaign. He claimed that 5% unemployment was “one of the biggest hoaxes in modern politics.” In August 2015, Trump told Time magazine that the real unemployment rate was 42%, at the time the Labor Department reading was 5.1%.

Here’s the full story:

Another reason to be worried about US earnings:

Here’s some instant reaction, first from bond trading magnate Bill Gross:

This is from James Pethokoukis of the American Enterprise Institute:

Bloomberg’s Joe Weisenthal suggests there’s little pressure on the US central bank to hike rates fast.

Economist Shaun Richards points out that wage growth is still modest, even though the US economy is creating more jobs.

America’s labour force participation rate, which measures everyone working or available for work, has risen to 62.9% from 62.7%.

That implies that some economically inactive people started looking for work again last month (and is one reason the jobless rate rose to 4.8%).

The number of Americans who would like to work more hours went up last month.

The U6 rate, which measure unemployment and underemployment, has risen to 9.4% from 9.2%.

November’s jobs report has been revised, to show that only 164,000 new jobs were created, not 204,000 as first thought.

December’s data has been revised up by 1,000, to 157,000.

The wages figure is a disappointment!

Average earnings only rose by 0.1% month-on-month in January, dashing hopes of a 0.3% gain.

America’s jobless rate has risen to 4.8%, from 4.7% in December.

US JOBS REPORT RELEASED

BREAKING: America’s economy created 227,000 new jobs in January, as the Obama administration ended and the Trump administration began.

That’s more than economists had expected, and suggests that the US economy began 2017 in good health.

More to follow!

Tension is building, with just five minutes to go....

US jobs report: a preamble

It’s nearly time for the US jobs report.... the first Non-Farm Payroll on Donald Trump’s watch.

Of course, Trump only took office on January 20th, so he can’t be credited or blamed for the state of America’s labo(u)r market. Of course, some firms will have made hiring decisions since the election on 9th November, but the impact of Trump’s policies will only be seen in NFP reports later this year and beyond.

Today’s report is effectively the starting point against which Trump will be judged.

A reminder: economists are expecting today’s report to be pretty decent, with around 180,000 new jobs created last month. The unemployment rate may also remain low, at 4.7%....

...however, Trump has criticised these figures for not showing the true picture in the jobs market. His team favour another measure, called U5, which includes people who have given up looking for work. That rate is currently running at 5.7%.

Economists will also be looking at the wage growth figures. Average earnings are expected to have risen by 0.3% during January, with the annual increase dipping to 2.8% from 2.9% in December.

The Daily Telegraph have just published a handy explanation to the Dodd-Frank legislation.

Here’s a snippet:

If Dodd-Frank made banks safer, why is it being reviewed?

Scrapping legislation that stifles businesses was a central plank of Mr Trump’s election campaign, playing to his image as a successful tycoon who made billions in the private sector. Last November, he described Dodd-Frank as “a sprawling and complex piece of legislation that has unleashed hundreds of new rules and several new bureaucratic agencies”.

Mr Trump, who has also previously argued that Dodd-Frank “made it impossible for bankers to function”, pledged to “dismantle” the law and replace it with “new policies to encourage economic growth and job creation”. Last week, while signing an executive order aimed at reducing regulations, he described Dodd-Frank as a “disaster”. Republicans have long been opposed to the law.

More here:

It’s that time of the day when the US president wakes up, opens Twitter, and addresses the world....

However, that meeting won’t include Travis Kalanick, the boss of Uber, who resigned from Trump’s economic advisory council following heavy criticism -- and a campaign to delete Uber.

In other banking news, Deutsche Bank is planning to cut 17% of its equities staff and 6% of its fixed-income staff globally, according to the Wall Street Journal.

It would be the latest stage in CEO John Cryan’s push to cut costs and return the company to profit (it reported a $2bn loss yesterday).

China and Germany reject Trump criticism over currencies

Earlier today, China’s government rejected claims from the Trump administration that it unfairly manipulates its currency.

Government spokesman Lu Kang told reporters in Beijing that China hopes to resolve concerns over global trade through talks, not through tit-for-tat devaluations.

Lu said:

China has never and won’t use a currency war to seek advantage in trade or to raise competitiveness in trade.

We have no intention of fighting a currency war. From a long-term perspective this is not beneficial to China.

(thanks to Reuters for the quotes).

Earlier this week, the president’s trade adviser caused a stir by claiming that Germany was getting an unfair advantage through the “grossly undervalued” euro.

German finance minister Wolfgang Schäuble has now hit back, pointing out that Berlin doesn’t actually control the euro....

Mining shares are falling after China’s central bank raised short term interest rates overnight.

That is holding back the FTSE 100, which is up 30 points thanks to the Trump-induced rally in bank shares.

Michael Hewson of CMC Markets says:

The mining sector has slipped back this morning after a disappointing Chinese manufacturing survey as well as slight tightening of money market rates by Chinese authorities. It’s not immediately clear what prompted this action, though there is speculation about rising concerns about a property bubble, and this slight rise could well be an attempt to warn that tighter policy is on the way. Glencore, Antofagasta, BHP Billiton, Anglo-American PLC and Rio Tinto have all slipped lower at the open.

On the upside banking shares have gained a lift on speculation that US President Trump may well sign a new executive order to roll back some of the Dodd Frank regulatory bill, helping push Barclays and RBS higher.

Bank shares boosted by Trump

Shares in banks and insurance groups are rallying in London, following the reports that president Trump will take steps to dismantle regulations brought in to prevent another financial crisis.

The prospect of Trump blocking president Obama’s fiduciary rules also seem to be boosting demand for financial stocks. They were due to come into force in April, compelling financial advisors to recommend the best product to clients, not simply a suitable one.

Barclays are leading the FTSE risers, up 2.5%, followed by Prudential, and Royal Bank of Scotland.

Chris Beauchamp of City trading firm IG says:

UK bank stocks are higher across the board this morning, after the magic words ‘Dodd-Frank’ and ‘repeal’ flashed across screens last night; leaving aside the political implications, the news could provide a tonic for the sector.

The top risers on the FTSE 100 this morning
The top risers on the FTSE 100 this morning Photograph: Thomson Reuters

Trump cannot simply demolish the Dodd-Frank rules on his own, but his executive orders still carry weight.

The FT has a good explanation:

Gary Cohn, the former Goldman Sachs executive who is now director of the White House’s National Economic Council, said Mr Trump would sign executive orders preparing the way to fulfil a campaign pledge to dismantle parts of Dodd-Frank.

However, the president’s ability to pull apart the sweeping reforms on his own is limited. Only Congress can make major revisions to the act it passed in 2010, but Mr Trump can use the orders to signal his priorities and instruct regulators enforcing the law.

“This is a table setter for a bunch of stuff that is coming,” said Mr Cohn, who stepped down as a top executive at Goldman Sachs to take the White House job.

Updated

Economists are concerned that Britain’s service sector slowed last month. Here’s some early reaction:

Dean Turner, UK Economist, UBS Wealth Management:

“The most notable aspect of the Services PMI was the ongoing strength of the input prices index, which rose again and is now above 60 level for the fourth consecutive month. Higher input prices will, in time, shift into selling prices otherwise firms will see their profits shrink. In line with the Manufacturing and Construction PMI, this points to inflation continuing its recent surge in the months ahead.

“Headline activity, although falling back slightly, suggests the economy is continuing to expand at a healthy pace, but one has to question its sustainability. Can the UK economy keep pace as inflation erodes the spending power of the consumer? We don’t share the Bank of England’s optimism that households will continue to whittle away their savings to support spending. Our conviction strengthened today with the softer outlook for employment highlighted in this survey.”

Howard Archer of IHS Global Insight:

Services have been the key UK growth driver along with consumer spending and January survey evidence for both has been softer. While these are surveys rather than hard data and not too much should be read into one month’s figures, it nevertheless fuels our suspicion that the UK economy will find life increasing difficult during 2017 and that growth will gradually lose buoyancy like a slow puncture.

Chris Sood-Nicholls, managing director and head of global services at Lloyds Bank Commercial Banking.

“There are some helpful economic ingredients that are keeping the PMI in positive territory. Healthy levels of employment and low interest rates mean consumers continue to spend. Business confidence has also been buoyed by a stronger than expected economic performance in 2016, and is likely to be further boosted by yesterday’s improved growth forecast from the Bank of England.

“However, some uncertainty remains and we’re seeing a cautious approach towards making major investment decisions across the services sector.”

UK service sector growth slows

Newsflash: Britain’s service sector grew slower than expected last month, as firms were hit by rising prices.

The Services PMI, which tracks activity in the dominant part of the UK economy, dropped to 54.5 for January from 56.2 in December, a bigger slowdown than expected.

Firms said that new business and employment also increased at slower rates, and their backlog of outstanding work fell a little.

And there are also signs that raw material prices are ballooning ahead, due to the weaker pound.

Updated

Bad news for UK energy customers... Npower has just announced it will raise the cost of its dual fuel package by almost 10%.

The move will hurt around half of its customers, putting £100 on the average annual bill. And where one energy firm leads, the others tend to follow...

Investors often flock to gold in time of nervousness. And Donald Trump’s election win has helped to push demand for bullion up to its highest level since the eurozone debt crisis was raging.

Good news! The Eurozone’s service sector has kept growing at the fastest pace in five and a half years.

Markit’s service sector PMI, which tracks activity across the sector, has just come in at 54.4 for January, matching December’s reading - the highest since mid-2012. That shows robust growth, with job creation hitting its fastest rate since 2008.

But...firms also warned that input costs are rising at the fastest rate in over five- and-a-half years That’s due to higher global commodity prices, increased import costs due to the weak euro and supplier price hikes.

Overall, the report suggests eurozone growth is gathering pace, according to Julien Lafargue, European Equities Strategist at JP Morgan. He says:

Although Germany has decelerated somewhat in the recent months, today’s PMIs are clearly pointing to accelerating GDP growth in the Eurozone in 2017. In addition, the rate of job creation - the fastest since February 2008 – indicates that this momentum could be sustained in the coming months. Going forward, it will be important to keep an eye on cost pressures which continue to intensify. The companies’ ability to pass these higher costs onto consumers will be critical to support margins and the earnings recovery we anticipate.

President Trump makes the front page of this week’s Economist:

And their leader column says that America’s allies are right to be worried by the president’s early moves:

Here’s a flavour:

WASHINGTON is in the grip of a revolution. The bleak cadence of last month’s inauguration was still in the air when Donald Trump lobbed the first Molotov cocktail of policies and executive orders against the capital’s brilliant-white porticos. He has not stopped. Quitting the Trans-Pacific Partnership, demanding a renegotiation of NAFTA and a wall with Mexico, overhauling immigration, warming to Brexit-bound Britain and Russia, cooling to the European Union, defending torture, attacking the press: onward he and his people charged, leaving the wreckage of received opinion smouldering in their wake....

More here: An insurgent in the White House

BoE deputy governor: Trump has been good for Britain

Deputy Governor of the Bank of England Ben Broadbent.
Deputy Governor of the Bank of England Ben Broadbent.

Donald Trump’s shock election victory has been “marginally” good for the UK economy, according to one of the Bank of England’s top officials.

Deputy governor Ben Broadbent argued that Britain has benefitted from the jump in financial confidence following Trump’s win last November.

Speaking to BBC Breakfast TV, Broadbent said:

“You’ve seen business confidence rise particularly in the United States. You’ve seen financial markets get more optimistic and I think that has had some impact on us.

“So far, at the margin, yes, it’s been positive for global sentiment, and for that reason, and to that extent, for us as well.”

Broadbent also cautioned, though, that we don’t know exactly what Trump will do:

“And I should say overall that... there’s a lot we have yet to see about the detailed plans, including those for fiscal policy, for government spending and taxes and so forth, so we’ll have to wait and see.”

Yesterday the Bank of England hiked its growth forecasts for the UK economy this year, prompting criticism that it was too gloomy after the EU referendum result.

Trump to roll back Dodd-Frank: What the experts say

Laurie Macfarlane of the New Economics Foundation is concerned that removing financial regulations could lead to trouble:

The FT’s Jeremy Grant also has concerns:

But the move could drive stock markets higher, argues Neil Wilson of ETX Capital, especially if today’s US jobs report is a zinger.

President Trump will meet with the bosses of some of America’s largest financial firms today, before signing executive orders to review Dodd-Frank and stall the Obama fiduciary rule.

He’s expected to see Blackstone CEO Steve Schwarzman, Blackrock boss Laurence Fink and JP Morgan’s Jamie Dimon, among others

That may not dispel concerns that the new administration is batting for the banking sector, rather than the public.

For example, Obama’s fiduciary rules are means to protect millions of retired Americans from being missold investments by brokers, to get bumper profits.

However, the White House line is that removing regulations is good for investors, which is why they want the rule rescinded.

As Bloomberg puts it:

The two executive actions are designed to lay out the Trump administration’s approach to financial markets, with an emphasis on removing regulatory burdens and opening up investor options, said the White House official, who briefed reporters on condition of anonymity.

Bloomberg TV

Trump to 'Undo Dodd-Frank Law and Obama's Fiduciary Rule'

U.S. President Donald Trump.

Some breaking news from America.... US president Donald Trump is expected to start unpicking some of the rules created after the 2008 crisis to to rein in the financial sector.

US media are reporting that Trump will order a review of the Dodd-Frank rules, which are designed to stop banks being too reckless.

He’s also apparently planning to sign another executive action that could halt President Obama’s Fiduciary Rules. This regulation forces retirement advisers to work in the best interests of their clients; Trump will ask the US labor secretary to consider rescinding it, reports say.

The Dodd-Frank rules were a major attempt to avoid a repeat of the crisis that brought down Lehman Brothers. They force banks to be more transparent, provide extra consumer protection, and are meant to prevent the kind of risks that led to the meltdown of the sector nine years ago.

But they’re also unpopular with banks, who argue that they restrict business.

Gary Cohn, the director of the White House National Economic Council, has told the Wall Street Journal that unravelling these safeguards will be good for consumers (as well as the banks, of course!).

Cohn (a former president of Goldman Sachs) argued:

“Americans are going to have better choices and Americans are going to have better products because we’re not going to burden the banks with literally hundreds of billions of dollars of regulatory costs every year.

“The banks are going to be able to price product more efficiently and more effectively to consumers.”

More here: Donald Trump Plans to Undo Dodd-Frank Law, Fiduciary Rule

The agenda: US jobs report and service sector data

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

Donald Trump once promised to be “the greatest jobs president God ever created”. And today we’ll find out whether his rise to the White House has had any impact on the US labour market yet.

The latest US Non-Farm Payroll (NFP), due at 1.30pm GMT (8.30am East Coast), will show how many new jobs were created across America last month, whether wages rose, and whether more people were lured back to the jobs market.

Economists expect a fairly solid report. The payroll is expected to rise by around 180,000 jobs leaving the unemployment rate at a healthy-looking 4.7%.

Michael Hewson of CMC Markets suggests we could get an even stronger report:

This would suggest that the 180k estimate being predicted is probably too low, with a figure in excess of 200k not being beyond the realms of possibility. Such a high number given an unemployment rate of 4.7%, would suggest that there is probably still a fair degree of slack in the jobs market.

Wages are also likely to be closely watched with a rise of 0.3% expected, with an annualised rise of 2.8%, down slightly from December’s 2.9%.

The report could easily move the markets, as the strength of the US jobs market will determine how quickly the Federal Reserve can raise interest rates this year.

Also coming up today

Data firm Markit is publishing its latest healthcheck on the world’s service sector companies today.

These Purchasing Managers Index (PMIs) reports are expected to show decent growth last month, suggesting the world economy began 2017 in good spirits despite the political uncertainty.

Here’s the timings:

  • 9am GMT: Eurozone (with a breakdown for each country)
  • 9.30am GMT: UK
  • 2.45pm GMT: US

The financial markets are expected to be calm, as traders wait for the NFP numbers:

We’ll be tracking all the main events through the day....

Updated

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