UK unemployment numbers out this morning show an increase in the headline rate from 3.9% last month to 4.1% this month. So far there are around 700,000 more people out of work now than there were in March. As we said yesterday, the situation is slightly misleading, in as much as the extend of the situation won’t be known until November or December, assuming Rishi Sunak doesn’t extend the furlough scheme in any way.
Other UK news: Boris got the second reading of the internal markets bill passed last night. It didn’t even look like a close call, despite all of those voices against it, with 340 ayes to 236 noes. Debating the PM earlier in the day was Ed Milliband, shadow business secretary, who stepped in for sir Keir Starmer, who is now self-isolating. Though Mr Milliband gave it his all, it does remind you just how impressive a QC crossing the PM is! The bill is now set for further debate today and tomorrow, before final votes next week.
In the US: Trump has held a ‘protest’ in Nevada. He called the rally a protest because indoor gatherings of more than 50 people are banned in the state unless they’re a protest! Earlier in the day he’d been in California addressing the wildfires and insisting more needed to be done on forest management to prevent them. Currently more than three million acres are on fire, almost the size f Northern Ireland, and Trump is sure that it can’t be climate change. Even if it was purely down to forest management, the Federal government owns the vast majority of California’s forests (58%) and not the state, who own just 3%, so it’s still his job to fix!
JP Morgan CEO Jamie Dimon has said that the economic recovery could be derailed by the failure to get another round of economic stimulus. He fears that the debt piles that have stacked up won’t be able to be serviced if people don’t get federal support and that in turn will push them into long term negative financial situations. This isn’t dissimilar to Morgan Stanley, who say that the lack of another round of stimulus is delaying the recovery by six months and means that a return to full strength isn’t going to happen before Q4 next year.
Staying with banks: Citigroup is set to be reprimanded by US regulators for failings in its risk management systems. The bank last week became the first major global bank to hire a female CEO, who will now have to oversee a multi-year and likely multi-billion dollar overhaul of their systems and infrastructure. Jane Fraser had previously led Citi’s retail bank and their Latin American business before that.
Amazon is plying its part in US employment, saying they expect to hire a further 100,000 people across the US and Canada to fulfil their expansion plans. This will take them to more than 700,000 employees in the US. Two weeks ago Amazon announced 7,000 more UK jobs will be created this year, taking the total number of employed here to 40,000.
Looking at today: The German ZEW index is probably the remaining data highlight, now that UK unemployment has been and gone. The ZEW is the German economic think tank that assesses the outlook for the economy and the expectations are that they will revise up their thoughts around the current economic situation, but soften their bullishness over the future recovery.
We’ve also got a category two hurricane, Sally, approaching the US gulf coast and is likely to make landfall later on today, possibly being upgraded to a category three by the time it gets there. This will keep oil markets on their toes.
Have a great day