On Friday, the non-farm payrolls report from the US showed that US jobs growth was much stronger than expected in January. Despite the longest government shutdown in history, a whopping 304,000 jobs were created last month, up from a downwardly revised 222,000 in December and significantly better than the 165,000 the markets had been expecting. It is the 100th consecutive month that the US economy has added jobs.
We did see the unemployment rate in America nudge up to 4% from 3.9% the previous month, but there is continued evidence that the US economy continues to be strong, even as the UK and eurozone appear to be slowing. The pound weakened against the euro and dollar on Friday, as manufacturing PMI in the UK dropped to its second-weakest reading since July 2016.
Inflation in the eurozone dropped to 1.4% in January from 1.6% the previous month. This was as expected and is the lowest rate of inflation since April 2018. Figures also showed that the manufacturing sector in Germany continues to struggle, with the latest reading pointing to contraction; in January it fell to 49.7 from a preliminary reading of 49.9 and 51.5 the previous month. It is the first contraction since November 2014.
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