Saturday, 4 June 2011

US employment growth slows, global output index rises

The economic reports on Friday were mixed.

In the US, Bloomberg reports that payrolls expanded at the slowest pace in eight months.

Payrolls grew at the slowest pace in eight months and the U.S. jobless rate unexpectedly climbed to 9.1 percent in May, reinforcing signs that a slowdown in the world’s largest economy is persisting into the second quarter.

Employers added a less-than-projected 54,000 jobs last month, after a revised 232,000 gain in April that was smaller than initially estimated, Labor Department figures showed today in Washington. The median forecast in a Bloomberg News survey called for payrolls to rise 165,000. The jobless rate climbed to the highest level this year from 9 percent a month earlier.

However, the ISM's non-manufacturing index rose in May.

Another report today showed service industries expanded faster than forecast in May. The Institute for Supply Management said its index of non-manufacturing businesses increased to 54.6 in May from 52.8 a month earlier. The median estimate of 74 economists surveyed by Bloomberg projected the measure would rise to 54. A reading above 50 signals expansion.

In the euro area, Bloomberg reports that growth in services slowed in May but was higher than initially estimated.

European services and manufacturing growth slowed in May to the weakest in five months as economies from Germany to Spain and Italy reported faltering output.

A composite index based on a survey of euro-area purchasing managers in both industries fell to 55.8 from 57.8 in April, London-based Markit Economics said in a statement today. That’s above an initial estimate of 55.4 published on May 23. The index has been above 50, indicating growth, for 22 months...

The euro-area services indicator fell to 56 from 56.7 in April, today’s report showed...

The UK's service sector also slowed in May, according to Reuters:

The service sector grew at its slowest pace for three months in May, as public holidays held back activity, stoking worries that the economy's sluggish start to the year has persisted into the second quarter. The Market/CIPS headline services PMI index eased to 53.8 last month from 54.3 in April, the lowest reading since February and below the 54.1 consensus forecast...

Separate figures on Friday showed the volume of new British construction orders fell by 23 percent on the quarter in the first three months of 2011, the biggest decline since 1987.

Nevertheless, the overall global output index actually rose in May. From Reuters:

The world's private sector economy expanded at a slightly faster pace in May, with companies in emerging powers China, Brazil and Russia leading the way, a business survey showed on Friday.

JPMorgan's Global All-Industry Output Index, which is based on the results of purchasing managers surveys of thousands of companies worldwide, rose to 52.6 in May, up from April's 21-month low of 51.8.

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