US unemployment falls to 8.8% in March

In the US, employment recorded a second straight month of solid gains in March and the jobless rate fell to a two-year low of 8.8%, according to the Labour Department. Non-farm payrolls rose by a higher-than-expected 216,000 last month, the largest increase since May.

However, in the manufacturing sector, new orders dipped unexpectedly by 0.1% in February, after an upwardly revised 3.3% gain in January, breaking a three-month streak of gains. Orders were held back by a drop in transportation orders.

The Chicago Purchasing Managers’ Index (PMI) edged lower to 70.6 in March from a revised 71.2 the previous month. Meanwhile, the consumer confidence data was slightly weaker than expected with a fall to 63.4 for March from an upwardly revised 72 previously.

In the eurozone, the flash inflation rate rose to 2.6% for March from 2.4% in February as energy costs continued to spike higher. As a result, European Central Bank officials maintained a tough tone on inflation.

This data will reinforce inflation fears within the ECB, which will also make the central bank even more determined to raise interest rates next week.

Meanwhile, according to the EU statistics, the unemployment rate fell to 9.9% in February from a revised 10% in January. Companies from Germany to Italy recruited workers to meet reviving global demand, which offset job cuts in Spain.

A separate report showed that the manufacturing PMI, which records factory activity across all the major euro area economies, fell to 57.5 in March, from 59 the previous month.

In the UK, fourth-quarter GDP was upwardly revised to - 0.5% from -0.6% previously reported. There was also some improvement in bank lending and mortgage approvals.

The current account deficit for Q4 increased to £10.5 billion from £8.7bn previously as the goods deficit widened to an all-time high.

Finally, the UK manufacturing index fell to a five-month low in March due to a weakening in domestic and export demand growth.

This article has been prepared by Bank of Valletta plc for general information purposes only.