173,000 new jobs were created in America in August, fewer than expected, giving few clues into when the Fed might raise rates

5.30pm BST

Another volatile week finished with further woe for investors. Among the day’s data, German factory orders fell 1.4% month on month in July, but the big event was the US non-farm payroll numbers. As it turned out the headline figure disappointed, with 173,000 jobs added in August compared with the 220,000 or so expected. But the unemployment rate dipped to 5.1% and hourly wages were steady, so there were few clues as to whether the US Federal Reserve would raise interest rates this month or not.

Despite the turmoil caused by worries about China, many analysts believed there was nothing in the jobs data to prevent an increase. Equally, many others believed the Fed would keep its powder dry. The markets seemed to side with the hawks, especially since just before the figures were released, Richmond Fed president Jeffrey Lacker said the non-farm numbers should not derail the case for a rate rise.

4.58pm BST

Meanwhile Moody’s has downgraded the senior debt ratings of four Greek banks to C, in the expectation that holders will suffer losses in the forthcoming recapitalisations. It said:

The downgrade…primarily reflects Moody’s expectation that junior and senior debt holders will be bailed in and sustain material losses as part of the upcoming recapitalisation process…

Although Moody’s expects uninsured depositors to be excluded from bail-in, as indicated by a recent Eurogroup statement, the negative outlook reflects the ratings agency’s opinion that the recapitalisation process remains fluid and banks continue to face significant credit risks.

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Source: The Guardian Circular Economy RSS