European stock markets are also roaring higher (as traders look longingly towards the end of the week).

In London the FTSE 100 is up 82 points, on hopes that a US interest rate cut might boost the global economy.

Wall Street is pushing higher; the Dow is now up 259 points or 1% at 25,980.

One more weak jobs report and the Fed could cut borrowing costs, predicts Ronald Temple, Head of US equity at Lazard Asset Management:

“The Fed has already set the stage for easing based on below-target inflation and escalating trade tensions. If tariffs increase as currently scheduled and we get another sluggish job report next month, I believe that it would be difficult to criticize a rate cut on July 31.

Donald Trump’s top economic advisor (for a little longer anyway) is discussing the jobs report on Bloomberg TV.

Kevin Hassett, head of the Council of Economic Advisors, denies that the escalation in the US-China trade war caused the drop in jobs creation.

It’s hard to believe that a roadblock in the Chinese talks could have a major macroeconomic effect.

Hassett concedes, though, that economic uncertainty can be a threat to the economy.

He also suggests that bad weather was a factor.

Hassett also faces questions about his decision to resign this week -- is he unhappy about Donald Trump’s plan to impose tariffs on Mexico unless it curbs migration?

Hassett refuses to reveal what he said to the president about the plan, insisting instead that Trump is right to emphasise border security reform.

But he does reveal that Trump will be briefed on this week’s negotiations with Mexican official when he returns from his trip to Europe tonight.

But did you resign because you’re unhappy about the Mexican tariffs?

They’re “utterly separate things”, Hassett smiles, saying he wants to spend more time with his family.....

This neat chart shows how America’s economy has been creating jobs steadily since the end of the last recession a decade ago - matching the rise in stocks.

Josie Dent, senior economist at the CEBR thinktank, also spies a US interest rate cut on the horizon.....

She says:

Positive economic growth in Q2 2019 will mark the 10th year of continuous expansion of the US economy. However after today’s labour market release, few people will be celebrating. With markets also spooked by the trade war, the Federal Reserve Open Market Committee (FOMC) is under pressure to cut rates.

This could come as soon as next month.”

This weak jobs report is another sign that Donald Trump’s trade war with China is hurting the US economy.

Richard Flynn, UK Managing Director at Charles Schwab, says trade tensions are a key worry.

“Today’s disappointing job numbers come hot on the heels of last week’s GDP figures, where economic growth was revised down, albeit by less than expected. However, in general the US economy has remained robust in recent months in spite of escalating trade tensions and global headwinds.

“The ongoing concern facing investors is the back and forth around rising tariffs from both sides of the U.S.-China trade dispute, with the ball currently in the Americans’ court. The near-term impact on the market is easy to see but determining the longer-term economic impact is more difficult.

Today’s report is the weakest since February, and it suggests America’s economy is losing momentum.

Bloomberg says:

U.S. employers last month added the fewest workers in three months and wage gains cooled, suggesting broader economic weakness and likely boosting calls for a Federal Reserve interest-rate cut as President Donald Trump’s trade policies weigh on the economy.

Payrolls rose 75,000 after a downwardly revised 224,000 advance the prior month, according to a Labor Department report Friday that missed all estimates in Bloomberg’s survey calling for 175,000. The jobless rate held at a 49-year low of 3.6% while average hourly earnings climbed 3.1% from a year earlier, less than projected.

Some Wall Street economists may be nervous about their own job security.

None of the financial experts who make predictions for a living thought today’s non-farm payroll report would be so weak. Some thought more than 200,000 new jobs would have been created.

Despite the weak job creation in May, America’s unemployment rate remains at just 3.6%, the lowest level since 1969.

But earning growth has slowed to 3.1% compared with a year ago, down from 3.2%. That’s another disappointment.

It’s nearly time for the last major economic news of the week - the US jobs report for May.

Jobs creation is expected to have slowed last month, with the non-farm payroll tipped to increase by around 175,000, from 263,00 in April.

Economists are also hoping that wage growth held steady, and that the jobless rate remained at last month’s 50-year low of just 3.6%.

As things stand, European stock markets are on track for their best week since April.

Britain’s FTSE 100 index has gained 150 points, or around 2%, so far this week. That means around two-thirds of the losses suffered in May have been clawed back.

Anxiety over global growth and trade wars seems to have been replaced by growing confidence that central banks will step in, again, by cutting interest rates to support growth.

That’s why today’s weak data from Germany didn’t spook the City. It simply means eurozone interest rates will remain at zero for even longer.

Holger Schmieding of Berenberg Bank explains why many of the concerns haunting markets should be “self-correcting”.

If growth softens more than expected, central banks will hold against it. The top central bank of the world, the US Fed, has significant ammunition left to do so. The ECB would have to break new ground. But it would do so eventually if need be even under a hypothetical German ECB president.

Unexpectedly robust growth in early 2019 may have encouraged Trump to escalate trade tensions in the last four weeks. If US growth now falls short of expectations and/or equity markets suffer badly, he may become more inclined to strike partial trade deals so that he can still campaign for re-election on an “I created jobs” platform.

If China’s needs to deliver a further stimulus to contain the domestic damage from trade tensions, it probably would not hesitate for long but just go ahead.

Chris Hunt, retail partner at Gowling, reckons Elliott’s takeover of Barnes & Noble makes sense:

“It is encouraging to see an example of the high street increasing the strength of its amour against the ongoing battle to retain physical stores.

The international element of the tie up will also help in term of supply chain capabilities and delivering against fast moving customer needs more closely than ever before – as ever, in-store experiences are likely to be a key feature of retaining the increased network of physical outlooks as the battle to co-exist with online sales continues in earnest.”

Books news! US bookseller Barnes & Noble is being acquired by the owners of the UK’s Waterstones book store group.

Elliott Management is paying $683m, in cash, for Barnes & Noble, and plans to run the group closely alongside Waterstones -- which has managed to repel the threat from Amazon in recent years.

CEO chief executive in James Daunt, who has led the turnaround at Waterstones for many years, will now tun B&N too.

Elliott says:

While each bookseller will operate independently, they will share a common CEO and benefit from the sharing of best practice between the companies. Waterstones has successfully restored itself to sales growth and sustainable profitability, based on a strategy of investment in their store estate and the empowerment of local bookselling teams.

Under Daunt’s leadership and Elliott’s stewardship, this commitment to bookselling excellence will strengthen the ability of both companies to navigate with success a rapidly changing retail landscape.

That works out at $6.50 per Barnes & Noble share, a 43% premium over Barnes & Noble’s stock price before rumours of a deal emerged earlier this week.

Back in the UK, banks have been rebuked for hitting customers with unfairly high overdrafts.

The Financial Conduct Authority is bringing in new rules that outlaw fixed daily or monthly fees for overdrafts. The watchdog will also block banks from imposing higher fees for unauthorised overdrafts.

The FCA is also insisting that banks provide a simple annual interest rate on all overdrafts, so we’ll all be able to shop around with our eyes open,.

The FCA also found that just 1.5% of customers are providing more than half of banks’ unarranged overdraft fees - suggesting the City is making a tidy profit from poor families who are struggling to get out of debt.

So, good news! Except there’s a nagging worry that the banks will find some other way to claw back the lost revenue.

Germany’s Brexit boost has fizzled out, agrees Edward Moya of trading firm OANDA.

He says:

It appears German factories are no longer benefiting from Brexit stockpiling and industrial production fell to the a near four year low, prompting many to believe first quarter momentum did not carry over.

With external risks are rising in the eurozone, German manufacturing remains exposed to possible further weakness on Brexit risk and the impending US-Europe tariff battle.

Economists often like to blame unexpectedly weak data on ‘seasonal factors’, or other one-off events.

In Germany’s case, we’ve had disruption in the car industry as new emissions test were introduced. Weather has also been a factor - including heavy snow last winter and unusually low levels on the Rhine (messing up transportation).

But analyst Daniel Lacalle says Germany’s factory downturn can’t be waved away so easily. The broad pattern is clearly down.

Andrew Kenningham of Capital Economics is also concerned that Germany’s economy remains weak.

He told clients that growth appears to have slowed in recent months (having expanded by 0.4% in January-March).

The fall in industrial production in April adds to the evidence that Germany has not shaken off the problems which hit it nearly a year ago, and suggests that the economy slowed sharply in the second quarter of the year.

German industry is still struggling with both domestic and external headwinds, including the weakness of global trade, slowdown in household consumption growth and regulatory confusion in the auto sector.

We don’t expect a sustained improvement anytime soon.

Economist Dr Klaus Borger from the KfW banking group has said the German economy has suffered “a black eye”, adding:

“Industry had a severe backfire in April, which is also reflected in very weak exports.”

Borger fears that the drop in 3.7% drop in exports and 1.9% decline factory output in April could soon have “a noticeable impact on the labour market.”

Swedbank analyst Andreas Wallström has shown how German industry has been on a downward path for some time:

The news that Germany’s economy struggled so much in April has sent European stock markets.... higher!

The main indices are all up around 0.7%, led by energy companies, technology firms and industrial groups.

Even German stocks are up. The DAX index has gained 0.5%, despite the news that factory output and exports both fell sharply in April.

Such confidence may seem misplaced. But it appears that investors are anticipating that the growth slowdown will force central bankers to cut interest rates (where possible) and maintain easy monetary policy for longer.

This chart confirms that German factories had their worst month in four years:

This latest decline in German factory output is disappointing, says Nadia Gharbi, economist at Pictet.

Economist Christophe Barraud believes Germany is also suffering from the slowdown in global trade growth, since the US and China escalated their trade dispute.

Danske Bank also believes there’s a Brexit effect.

They suggest that German exports tumbled in April because UK firms stopped stockpiling goods, after Britain’s exit from the EU was delayed until October.

Brexit appears to have taken a bite out of German exports in April.

Destatis reports that €22.3bn of goods were exported to EU countries who aren’t in the eurozone, a plunge of 8.7% compared with April 2018. Imports from such countries rose by 0.7%, to €18.2bn.

Nine EU members aren’t in the euro, the largest being the UK (the others are Bulgaria, Croatia, Czech Republic, Denmark, Hungary, Poland, Romania and Sweden).

German exports to eurozone members, though, only fell by 0.5% year-on-year, while sales to countries outside Europe jumped by 4% annually.