US jobs growth beats forecast | IHG rebounds
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4.30pm: US jobs growth beats expectations
US jobs growth was stronger than expected in April, which defies suggestions that the economy is heading for recession.
The US added 253,000 non-farm jobs last month, according to the Bureau of Labor Statistics,
Hourly wage growth also strengthened to 0.5% month-on-month. On a year-over-year basis, wages climbed 4.4%.
Wages are a key factor in inflation and analysts believe the data may reinvigorate the idea that the Fed is not yet done with tightening the monetary cycle.
The FTSE 100 tracked Wall Street higher in afternoon trade. At the close London’s blue chip index was 75.74 points higher at 7,778.38.
8.10am: Market rises
The FTSE 100 was 40 points higher at 7,742.91 ahead of today’s key US employment figures.
7am: IHG rebounds, CEO leaving
InterContinental Hotels, which owns the George in Edinburgh, announced a robust first-quarter recovery in revenue, and its CEO will depart next month.
It reported a substantial increase in revenue per average room, boosted by strong growth in China after travel restrictions were removed.
First-quarter revenue per average room (RevPar) climbed 33% year-on-year with Americas up 18%, EMEAA up 64% and Greater China up 75%. Occupancy was 64%, up 5 percentage points on last year.
Chief executive Keith Barr said: “Leisure demand has remained buoyant, and there has been further return of business and group travel as expected.”
He said the company opened 8,000 rooms across 45 hotels in the quarter. Barr also said he intends to step down as CEO effective 30 June and will be succeeded by Elie Maalouf who has led IHG’s Americas business as regional CEO for the past eight years.
British Airways’ parent company has posted its first Q1 profit for four years and raised its forecast for annual operating profits following a strong recovery in bookings.
Investors are digesting central bank decisions in the US and EU, and looking ahead to US jobs data later in the day.
The FTSE 100 hit a four-week low, and the DAX a three-week low while New York continued to be spooked by developments in the banking sector. The Dow Jones Industrial Average closed down 0.9%, the S&P 500 down 0.7% and the Nasdaq Composite down 0.5%.
Shares in PacWest fell 51% after the regional lender said it had been approached by potential partners and investors over a potential sale. Blue-chip banks also closed in the red.
US nonfarm payrolls net additions are expected to slow to 179,000 from 236,000 in March, according to FXStreet. A strong number would confirm the likelihood of another interest rate hike in June.
Financial markets in Japan were closed for Children’s Day. In China, the Shanghai Composite was down 0.5%, while the Hang Seng index in Hong Kong was up 0.6%.