These are stories Report on Business is following Friday, June 1, 2012. Get the top business stories through the day on BlackBerry or iPhone by bookmarking our mobile-friendly webpage.
Gloom deepens Global markets plunged today on fresh economic measures from the United States to China to Europe.
A new reading of the U.S. labour market was particularly disappointing, suggesting America still has a long, hard climb back and that its recovery is losing stream.
"Today’s weak payrolls report is unlikely to allay recent intensified concerns about deceleration after a seemingly promising start to the year," said CIBC World Markets economist Peter Buchanan.
The day kicked off with purchasing managers indexes, which take the temperature of manufacturing, in China and then in Europe. Jobs numbers across Europe were equally disappointing, highlighting the struggles, particularly of the region's weaker nations.
Here's the damage so far:
- The U.S. economy created just 69,000 jobs last month, according to the Labor Department today, well below what was expected, and the unemployment rate inched up to 8.2 per cent. That's the first time in about a year that the jobless rate has climbed.
- The Markit Economics measure of manufacturing in the euro zone slipped last month to 45.1 from 45.9. The 50 mark separates contraction from expansion, so that means a contraction in industry is worsening.
- Unemployment in the 17-member monetary union stands at 11 per cent, while the regional differences are stark, from the highest, in Spain at 24.3 per cent, to the lowest, in Austria at 3.9 per cent. More than 17 million people can't find jobs. Across the wider 27-member European Union, almost 25 million people are out of work.
- The reading on manufacturing in China slipped to 50.4, markedly below what was expected and a measure analysts say could further hurt commodities prices. Economist Wei Yao of Société Générale describes China's outlook as a "bumpy landing."
Amid all this, investors were grim.
"The flight to safety continues," said sales trader Yusuf Heusen of IG Index.
"German bund yields are dropping once again, with the two-year note seeing yields actually turn negative thanks to the sheer volume of buying; investors are now so desperate to park their money somewhere safe that they are effectively paying the German government to hold their cash," he said in a research note.
"A slew of PMIs from around the world show that the global economy remains weak, with particularly worrying readings from the U.K. and Germany, whose indices dropped to their lowest levels since mid-2009."
Tokyo's Nikkei lost 1.2 per cent, though Hong Kong's Hang Seng gained 0.4 per cent. European stocks plunged, followed in North America by the S&P 500 , the Dow Jones industrial average and Toronto's S&P/TSX composite .
"New month, new mood? Not so much," said Benjamin Reitzes of BMO Nesbitt Burns.
- Follow our Market Blog
- U.S. jobs report disappoints
- U.S. factory growth slows in May
- Carolynne Wheeler's Economy Lab: Slumping purchasing index adds to China fears
- Euro zone jobless rate sits at record 11%
Growth tepid Canada's economy expanded at a muted annual pace of 1.9 per cent in the first quarter of the year as consumers took something of a breather.
That matched the growth rate in the final quarter of last year, according to Statistics Canada today, though is below what the Bank of Canada had projected would be an expansion to the tune of 2.5 per cent.
Business investment in Canada drove the expansion in the first three months of this year, while growth in consumer spending, which had powered 2011, slowed.
"The March GDP result doesn’t provide a great handoff to the second quarter, and suffice it to say that we’re not holding our breath for a strong pickup in growth given a still-soft U.S. economy ... and confidence headwinds emanating from the European crisis," said Robert Kavcic of BMO Nesbitt Burns.
"Against this backdrop, the Bank of Canada will likely be on hold for the remainder of the year."
GM to close one of its plants The Canadian Auto Workers union squeezed five more years of production than originally scheduled out of a car assembly plant in Oshawa, Ont., but received the official news today that the factory will close next year, eliminating as many as 1,500 jobs, The Globe and Mail's Greg Keenan reports.
General Motors Co. told the union the plant will cease production next June, five years later than the original closing date of 2008. That 2008 date was the time frame set out in 2005 when GM first announced the closing in one of a series of plant shutdowns and job cuts it made before it went into Chapter 11 bankruptcy protection in 2009.
BP to sell Russian stake BP PLC plans to sell its stake in one of Russia's biggest oil producers, a sale that could be worth between $15-billion (U.S.) and $30-billion.
BP said today it has received overtures for its interest in TNK-BP, and it's pushing ahead to try to sell it.
It has been a troubled partnership between BP and its parter Alfa Access Renova.
"BP announced today that it has received unsolicited indications of interest regarding the potential acquisition of its shareholding in TNK-BP," the energy giant said.
"In light of these unsolicited approaches and consistent with its commitment to maximising shareholder value, and its obligations under the Shareholder Agreement, BP has notified Alfa Access Renova of its intention to pursue a potential sale."Report Typo/Error