Data released last week showed that the US jobs market remained resilient. The US economy added 196,000 jobs in March, exceeding market expectations and recovering from the 33,000 recorded in February. The stronger jobs data will comfort those that are concerned about growth in the world’s largest economy, although the rolling 3-month figure still remains weaker.  The Bureau of Labour Statistics (BLS) also released wage data, showing that average hourly earnings increased at a rate of 3.2%. This figure fell short of expectations and was slightly down on the previous reading; however, it still represents real growth in earnings and alongside the high employment rate will continue to support consumer spending.

 Purchasing Managers Indices Decline

Figures out last week from several major economies pointed to further slowing ahead. Purchasing Managers Indices (PMIs) are considered leading indicators to economic growth, with any reading below 50 signifying a contraction. The most extreme of these was from the German factory sector, with a reading of 44.7 in March. This was the lowest reading since the Eurozone debt crisis in February 2012. German manufacturing has been hit by a combination of weakening China imports, uncertainty surrounding Brexit and changes in EU emissions regulations. Globally, PMI’s are a mixed bag, in contrast to the synchronised expansion in 2017/2018. They are pointing to a continuing period of lacklustre economic growth in the near term, with an increasing possibility of a recession in some major economies.

 Brexit – Labour get involved

Having failed to get her deal over the line with her own party, Theresa May has turned to the opposition for help. The end of last week saw discussions between the Government and the opposition Labour Party to try and find a consensus, although one is yet to be found. It is easy to anticipate that Jeremy Corbyn will use the opportunity to gain concessions from the government; however, there has been little detail of the discussions so far. Most observers are suggesting that any agreement with Labour will result in a “softer” Brexit. One which may involve a customs union and possibly a second referendum. If no deal is made the default is still to leave on Friday. However, this process has shown that when up against it, there can be great flexibility by the Government, Parliament and the EU to extend this date if it means avoiding a no deal.

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