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US Job Openings Climb

JOLTs Data Corroborates Federal Reserve’s Comments on Employment Improvement

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Federal Reserve Chair Janet Yellen has prominently stated that policymakers prefer to monitor the health of the labor sector by following results from the JOLTS job openings survey conducted by the Bureau of Labor Statistics. Data released once more proved the labor economy is improving rising amid speculation for another rate hike in the coming months.

UK Output Drops

Annualized manufacturing production from the United Kingdom dropped for the 5th consecutive month according to the latest report from the Office for National Statistics. Manufacturing output for the month of November fell -0.40%, matching the October contraction with the year over year figure shrinking -1.20% from previous month’s revised -0.20%. Machinery and equipment continued their slide, declining for a 12th month after recording a -13.70% drop while transport equipment managed to be the one bright spot, growing by 6.40%. With manufacturing contributing around 80.00% of total industrial production, the monthly output contraction of -0.70% from October’s 0.10% marked the biggest decline in 3 years. Electricity, gas and steam recorded the largest drop, falling -2.10%. Annual industrial production expansion slowed to 0.90% versus the prior month’s 1.70%. The Pound continues to give ground with the GBPUSD pair briefly falling below 1.4400 before rebounding.

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Uptick in JOLTs Job Openings

United States policymakers opt to follow the Job Openings and Labor Turnover Summary report as the preferred gauge on labor for the US according to Federal Reserve Chair Yellen. The Bureau of Labor Statistics reported job openings for the month of November rose to 5.431 million, beating both expectations of 5.410 million and last month’s revised value of 5.349 million. Due to the fact that it represents a period before the rate hike and December nonfarm payrolls figure, this is another strong sign of improvement in the labor economy, especially for jobseekers. A rise in job openings and people quitting their jobs should be interpreted as sign of confidence signaling a resilient economy that may lead to sustained wage growth. Job openings reportedly increased by 57,000 in health care and social assistance while remaining mostly unchanged for the private and government sectors.

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Chinese Trade Balance surges

China’s General Administration of Customs reported a rise in the trade surplus to $60.09 billion in December. The surplus marked a major advance compared to last month’s value of $54.10 billion while trouncing expectations of $53.00 billion. According to the report, exports showed vast improvement after falling a more modest -1.40%, marking the sixth consecutive month of declines.  Meanwhile imports sank by -7.60%, continuing their deceleration for nearly a year. In a positive sign for energy, crude oil imports rose by 8.80% reaching a record high of approximately 6.70 million barrels per day. Economists now believe that recovery for China is on track and that policymakers do not need to devalue the country’s currency any further over the near-term. The People’s Bank of China efforts towards Yuan devaluation since the start of the year have sent Chinese financial markets tumbling, but have undoubtedly benefited the struggling export economy.

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South African Industrial Output Falls

The South African Statistics Office reported manufacturing output decreasing by -1.20% for the month of November, dovetailing a decline of -1.70% in October and missing expectations of -0.20%. The main contributors to the decline were basic iron and steel, non-ferrous metal products, metal products and machinery with the component falling by -7.00%. Plunging commodity prices and decisions not to raise output have seen South African producers shoulder increasing losses as global trade decelerates.  Aside from the external picture, the overall weakness in South Africa’s industrial output reflects a wide range of factors including problems with low productivity, regular labor market disruptions and infrastructure especially in electricity power cuts. Since the spike earlier in the week, the US dollar has pulled back against the South African Rand with the USDZAR pair sitting back below 16.5000.

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