The US labor market burned red-hot in January as hiring unexpectedly surged and unemployment fell to a 53-year low, defying recession forecasts and adding pressure on the Federal Reserve to keep raising interest rates.

Nonfarm payrolls increased 517,000 last month after an upwardly revised 260,000 gain in December, a Labor Department report showed Friday. The unemployment rate dropped to 3.4%, the lowest since May 1969 and average hourly earnings grew at steady clip.

Hiring topped all economist estimates, putting to rest any concerns that a manufacturing downturn and layoffs in the technology sector translate into weaker hiring across the country — at least for now. 

Payroll gains were broad-based, as factories, retailers and restaurants added jobs. Even construction increased employment amid a slump in housing. The robust demand for labor also pulled in traditionally sidelined workers, including Black Americans, whose jobless rate matched a historic low of 5.4% last month.

“A stunningly strong jobs report raises serious doubts about the economy slipping into recession and the Fed ending its tightening cycle this spring,” Sal Guatieri, senior economist at BMO Capital Markets, said in a note. (Bloomberg - Continue Reading)

European Union member states agreed to impose a cap of $100 per barrel on sales of Russian diesel to third countries as part of an effort to limit Moscow’s revenues, according to people familiar with matter. 

The price cap mechanism is tied to an EU ban on seaborne imports of Russian refined fuels that kicks in Sunday. The bloc agreed to the $100 level for petroleum products that trade at a premium, including diesel. It backed a cap of $45 for those that sell at a discount, such as fuel oil and some types of naphtha.

EU diplomats also agreed to delay a review of the $60 price cap for Russian crude oil until March, when they’ll begin regular two-month reviews of all the cap levels, the people said. Setting prices requires unanimous agreement among the EU, as well as signoff from the Group of Seven.

The new caps are being negotiated in coordination with the G-7, which has signaled that it can accept the $100 price for diesel. Officials have expressed concerns that setting too low a level risks causing price spikes or supply glitches in Europe. (Bloomberg - Continue Reading)