Jobs growth in the US economy slows

Today’s top stories

• UK culture secretary adamant UK is “open for business” despite blocking the sale of Telegraph media group to an Abu Dhabi-backed company

• Chinese AI start-ups race to rival US counterparts including OpenAI and Anthropic.

• Keir Starmer hails ‘seismic’ by-election result as Conservatives face losing half of contested council seats. Follow the latest coverage here.

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Good evening.

The US added 175,000 jobs in April, falling well below expectations forecast by a Bloomberg poll that predicted a 241,000 rise. This marks the smallest rise for six months, a sign that the labour market is cooling in the world’s largest economy.

The employment data comes after the chair of the Federal Reserve, Jay Powell, signalled earlier this week that US borrowing costs are likely to remain higher for longer as the US battles persistent inflation.

Speaking after the Federal Open Market Committee meeting on Wednesday, he claimed there had been a “lack of further progress” towards the 2 per cent inflation goal, and suggested rates would remain at their current level of 5.25-5.5 per cent.

However, the slower pace of jobs growth than expected in April had traders speculating that the Fed will cut rates sooner. In response, treasury bond yields dropped and stocks rose. The two-year Treasury yield, which moves with interest rate expectations, dropped 0.14 percentage points to 4.74 per cent.

Cutting rates could give President Joe Biden a boost in the upcoming US election as Americans grow increasingly unhappy with high borrowing costs. Holding rates steady could prevent Biden winning votes from those who thought the economy was stronger under Donald Trump, but Powell was adamant on Wednesday that cuts wouldn’t follow the political calendar.

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Need to know: UK and Europe economy

UK growth of 0.4 per cent will be the slowest in the G7 this year apart from Germany, according to new OECD forecasts. Inflation in the UK will hit 2.7 per cent, the highest in the group, the OECD says.

The equal pay claim that tipped Birmingham city council into bankruptcy last year is likely to be much lower than the £650mn-£760mn estimate, according to Michael Gove’s levelling up commissioner.

NatWest-owned Coutts bank plans to shift customers away from UK equities to access ‘mega-themes’ in international stocks, despite government efforts to revive London’s capital markets.

Société Générale, France’s third-biggest bank, has reported a smaller than expected 22 per cent fall in net profit for the first quarter. This follows former trader Kavish Kataria’s criticism of the bank that he was made a “scapegoat” for bosses not taking “responsibility [for] the lapse in their risk system”.

Foreign buyers flock to purchase Sweden’s secluded properties as low house prices, remoteness and clean air quality attract many to the region.

The award-winning Inside Politics newsletter and Political Fix podcast are teaming up for an expert Q&A to digest the UK local election results, debate election strategies and answer your questions. Register here for free to watch live on May 8 at 13:00 – 14:00 BST.

Need to know: global economy

The OECD said high flows of immigration into rich countries are helping to strengthen jobs markets and bolster growth, as it lifted its outlook for the global economy. The Paris-based organisation predicted the world economy would grow by 3.1 per cent this year, up from an earlier forecast of 2.9 per cent.

G7 countries are at odds over what to do with Russia’s frozen assets currently gathering dust across Europe. Our Big Read explains more.

Meanwhile, Russian energy giant Gazprom plunged to its biggest loss in at least a quarter of a century after gas sales more than halved in the fallout from Putin’s war. Russia’s grip in the Black Sea has been broken by Ukraine’s targeting of Moscow’s warships.

The US military is nearing completion of a $320mn floating pier off Gaza, a complex project to allow seaborne humanitarian aid into the besieged enclave. Turkey has halted trade with Israel after accusing the country of stoking a “humanitarian disaster” in Gaza.

Karim Khan, the International Criminal Court’s chief prosecutor, hit back at unnamed “threats” against his work on Friday after Israel’s prime minister expressed outrage over possible legal action by the tribunal related to the war in Gaza.

Despite the Japanese authorities’ attempt to prop up the yen earlier this week with two suspected market interventions totalling $59bn, Japanese consumers may still cut back on spending.

Need to know: business

Mike Ashley’s Frasers Group has dropped its €50mn lawsuit against Morgan Stanley ahead of a judgment in the London case that saw the British retail tycoon accuse the Wall Street bank of “snobbery”.

The chief financial officer of Diageo, the spirits group, has stepped down after a turbulent three years in the role including a profit warning and poor share price performance.

Apple’s shares rose after it exceeded analysts’ downbeat expectations for quarterly revenue. The tech company reported revenue of $90.75bn for the first three months of 2024.

Shell, Europe’s biggest oil and gas company, smashed past earnings expectations for the first quarter to hit $7.73bn. Its big investors are urging other shareholders to back greater climate action and align its “medium-term” emissions target with the Paris Agreement on limiting global warming.

US regulators on Thursday alleged Scott Sheffield, the former head of Pioneer Natural Resources, had tried to co-ordinate production levels with the Opec cartel to “pad Pioneer’s bottom line . . . at the expense of US households and businesses.”

South Africa’s antitrust regulator has said it will have the last word on whether a takeover of Anglo American by its larger rival BHP can go ahead.

Science round-up

The UK High Court ruled on Friday that the UK’s latest strategy for meeting its legally binding targets on reaching net zero emissions is unlawful.

Climate change not only increases the risk of mosquito-born infections causing malaria and dengue, but could also fuel the rise of antibiotic-resistant “superbugs”. Read more in our Special Report: Health and Climate Change.

Noctiluca scintillans, or “sea sparkle”, has two faces. While it bedazzles in the dark in places like the Arabian Sea, it’s responsible for a reeking green carpet of algae by day. Researchers are trying to stop its spread.

Should we worried about the return of bird flu? Commentator Anjana Ahuja assesses the risks.

Voyager 1, the 1970s spacecraft, has come back to life after Nasa engineers said they had fixed the corrupted memory in one of its onboard computers. News that the craft, now outside the solar system, can resume sending signals to earth is both uplifting and bittersweet.

Molecular hydrogen therapy, which has been popular in Japan and China for years, is now becoming more popular in the west. Is it just more woo-woo or might it have a role in healthcare? Senior science writer Clive Cookson tries it out.

Some good news

Adding bacterial spores to plastics could slash the environmental damage caused by plastics’ long lifespan, according to scientists at the University of California San Diego. This kind of ‘living plastic’, exposed to nutrients present in compost, could biodegrade within five months.