Spreadex Market Update
Jobs up, unemployment down, diesel car demand is down
This month’s non-farm payroll saw a sharp rebound in job growth with the official figure being 211,000 new jobs in April. This is a distinct upturn from the 79,000 level for the previous month and is comfortably above the monthly average of 185,000 for this year.
It was good news as far as the unemployment figures go as well, the rate dropping to near 10-year low at 4.4%. This points to a tightening labour market and could be enough to seal the case for an interest rate increase next month.
The new jobs came in a variety of sectors with heavy increases in hospitality, healthcare and social assistance as well as business and professional services. One man who agrees with the impending rate hike is Gus Faucher, a chief economist at PNC Financial in Pittsburgh. He was quoted as saying, "With continued solid job growth, the US economic expansion will continue throughout 2017. The Fed will raise the federal funds rate again in mid-June as the economy is approaching full employment".
In other news there was a drop in sales of diesel cars across Europe which is driving down the price of used vehicles. This comes not long after the Volkswagen emissions test scandal and poses a significant risk to financing plans used by major automakers to sell millions of vehicles.
Authorities are planning to increase taxes on diesel vehicles due to the fact that they are much more polluting than was originally thought. There are also calls to ban their use in some European cities. All this has resulted in a 19% drop in new diesel car registrations in Germany for April and a 27% fall in the UK.
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