US Jobs Report Beats Estimate, UK Manufacturing and Construction Output Fall, Doubts about BOE Rate Hike, more…

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Economic data in the UK showed further contraction today, this time in manufacturing and construction output. Elements of the media are associating the numbers as a ‘fallout from Brexit, which has now become a standardised response in what is a subtle but effective programme of perception control.

According to the BBC, analysts think the prospect of the Bank of England raising interest rates in the near term is now less likely given the latest data. I would caution against this outlook for two reasons. Firstly, the ‘normalisation of monetary policy‘ narrative is a centralised directive and emanates from institutions such as the Bank for International Settlements. The UK is not immune from it. Secondly, the Federal Reserve’s course of rate hikes comes amidst a slew of negative data, which the Fed considers ‘transitory‘. In other words, signs of an economic slowdown in the U.S. are not going to change the Fed’s plans. The last BOE policy meeting showed a divide amongst the committee members, at a time when inflation is running at almost 3%. I believe it is only a matter of time before rates rise in the UK, in accordance with the globalist mandate to ‘normalise‘ monetary policy.


CNBC: US nonfarm payrolls total 222,000 in June vs 179,000 expected

  • The U.S. job market roared back to life in June, with a better-than-expected 222,000 new positions created in June while the unemployment rate held at 4.4 percent, according to a government report Friday.
  • Wage growth, however, remained muted, with average hourly earnings rising 2.5 percent on an annualized basis, essentially unchanged from the previous month. On a monthly basis, the rise was 0.2 percent, which actually was a shade below the 0.2 percent expectation.
  • An alternative measure of unemployment that counts discouraged workers and those holding part-time positions for economic reasons — the underemployed — rose from 8.4 percent to 8.6 percent.

BBC: UK manufacturing output falls and trade deficit widens

  • Output in both the manufacturing and construction sectors fell in May, according to the Office for National Statistics (ONS).
  • Separate data from the ONS showed that the UK’s trade deficit widened in May.
  • Sterling fell 0.7% against the dollar as analysts suggested an early interest rate rise was now less likely.
  • Manufacturing output fell by 0.2% compared with April, whereas analysts had expected it to rise. The sector was hit by a 4.4% drop in car production – the biggest fall since February last year.
  • Construction output was also worse than expected. It fell by 1.2% in May from April, and was also down 1.2% in the three months to May – the sharpest such drop since October 2015.

New York Times: Recovery Gives ECB Room to Pare Stimulus Says Weidmann

  • Faster economic recovery in the euro zone is giving the European Central Bank room to pare back its extraordinary stimulus measures, Bundesbank President Jens Weidmann said on Thursday.
  • “The ongoing economic recovery now raises the prospect of a monetary policy normalisation,” Weidmann said.
  • “This is not about a full braking … but taking our foot somewhat off the gas.”
  • “The timing and rate of monetary policy normalisation depends on the extent to which price rises are sustainable and self-sustaining,” Weidmann added.

Independent: Brexit – Whole EU finance system faces a ‘tipping point’, warns new report

  • A leading lobby group has issued a fresh, damning Brexit warning, forecasting that the whole of the EU could face a “tipping point” if financial firms quit London as a result of the country’s split from the bloc.
  • TheCityUK said on Thursday that, while the outcome of the UK’s split from the EU is still uncertain, there is a general expectation that the country will lose some access to the single market.  As a result, businesses will have to relocate parts of their UK activity to EU locations.
  • In the banking sector, that migration is already happening.

USA Today: US factory orders fall in May for second straight month

  • Orders to U.S. factories fell for the second straight month in May, a potentially worrisome sign for American industry.
  • The Commerce Departments reported Wednesday that factory orders declined 0.8% in May, the biggest drop since last November. They fell 0.3% in April.
  • Economists had expected factory orders to drop again in May — but the fall was twice what they’d forecast.
  • Overall economic growth has been lackluster. The U.S. economy expanded at a 1.4% annual pace from January through March. Consumer spending on long-lasting durable goods dropped at a 1.6% annual pace in the first quarter, the weakest showing since the second quarter of 2011.

Reuters: Euro zone May retail sales rise more than expected

  • Euro zone retail sales increased by more than expected in May, aided by stronger sales of clothes and shoes as well as fuel for vehicles, European statistics office Eurostat said on Wednesday.
  • Compared to the previous month, May sales in the 19 countries sharing the euro currency increased by 0.4 percent, making for a 2.6 percent annual increase.
  • The rise in sales was strongest in Latvia, Belgium and Estonia, while spending in Finland and Malta fell.

Sky News: ‘Worst decade for UK productivity since Napoleon’

  • Britain is now suffering its worst decade for productivity – the broadest measure of fundamental economic performance – for as long as two centuries, according to Sky News analysis.
  • Figures released by the Office for National Statistics (ONS) revealed that productivity – calculated by dividing gross domestic product by the number of hours people worked – is now lower than it was a decade ago.
  • The ONS said output per hour fell by 0.5% in the first three months of the year. That brought the level down back below where it was at the end of 2007.
  • According to Sky News analysis based on Bank of England and ONS data, that means Britain’s economy has now experienced its least productive decade for more than two centuries, since the era of George III, when Britain was mired in the Napoleonic wars – and at war with America.

CNBC: The Fed grows worried its loose policy threatens US financial stability

  • The Federal Reserve’s most recent interest rate hike came amid worries that keeping policy loose was posing increasing risks to financial stability and the economy.
  • Fed officials indicated a determination to continue raising rates even with muted inflation levels, which they considered to be temporary and likely to rise over the long run to a targeted level of 2 percent, according to a summary from the June meeting of the policymaking Federal Open Market Committee.
  • Officials also expressed little concern that low inflation would persist.
  • However, Fed officials were divided on when the balance sheet runoff should begin, and did not release a timetable on when it would happen.
  • On stock prices, FOMC members “suggested that increased risk tolerance among investors might be contributing to elevated asset prices more broadly; a few participants expressed concern that subdued market volatility, coupled with a low equity premium, could lead to a buildup of risks to financial stability.”
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