Finally, the London stock market has posted its highest closing level in a week, lifted by the US jobs report.

The FTSE 100 closed 82 points higher at 6240, a gain of 1.3%

Travel stocks and banks were among the big gainers, with airline group IAG rallying by 5.7%, and both Royal Bank of Scotland and HSBC up 4.5%.

Hotel operator Whitbread gained 4.2%, while Primark owner ABF rose 4.1% after it reported solid Primark sales since stores reopened.

David Madden of CMC Markets says strong US jobs report lifted the already bullish mood in the City.

Stocks were pushing higher this morning on the back of the news that Pfizer and BioNTech saw positive results from their drug trial that they are hoping will be a vaccine for Covid-19. The news encouraged traders to buy into the market, but the results have yet to be reviewed by a medical journal.

In June, the US added a record 4.8 million jobs, which smashed the 3 million consensus estimate. The May reading of 2.5 million was revised up to 2.69 million. The unemployment rate fell from 13.3% to 11.1%, while the consensus estimate was 12.3% Yearly average earnings dropped from 6.6% to 5% - this is probably because a large number of lower income workers re-entered the work force. The labour participation rate increased to 61.5% from 60.5%. The US labour market still has a long way to go but it is clearly heading in the right direction. The jobs data spurred on the buying of stocks as the recovery is on traders’ minds.

But as we covered earlier, the US labor market is still much weaker than a few months ago.

Shane Balkham, Chief Investment Officer at Beaufort Investment, says it’s too early to celebrate:

It it remains too difficult to call this trend with any real confidence as we continue to see-saw between lockdown tightening and lockdown loosening. Instead, it’s the revision to these numbers in the next set of data that will prove most revealing. The path to normalisation will be volatile until a vaccine is found, and in the meantime, investors will have to become accustomed to a tentative strategy of ‘two steps forwards, one step back.’”

Here’s our latest news story on the jump in US employment, and the fears that a new wave of Covid-10 infections.

We’ll be back in the morning....GW

A former top UK civil servant has called for the government to consider a wealth tax, as part of its strategy for addressing the debt mountain built up under the pandemic.

Our economics correspondent Richard Partington has the details:

The UK government’s response to the coronavirus and the dramatic rise in public borrowing during the crisis should include a wealth tax on the richest in society, a former head of the civil service has said.

Sir Gus O’Donnell, who served as cabinet secretary under David Cameron, Gordon Brown and Tony Blair, said the Conservative government could prove it was serious about fighting inequality and levelling-up Britain by increasing taxes on wealth.

Describing the response to the coronavirus crisis as a “clear burning platform” for such a move, he said: “Covid has created a situation where we’re moving to a world where debt and deficit levels will be at levels we haven’t seen for decades.”..

More here:

President Donald Trump just held a brief press conference, saying the US economy is ‘roaring back’ with its biggest jump in new jobs ever.

Trump hailed June’s jobs report as a sign that his administration is doing a grand job (despite the deeply worrying spike in Covid-19 cases).

He also cheered the recent recovery in the stock market, and even claimed that shares would fall to ‘nothing’ with the wrong president in charge.

Trump says:

These are historic numbers at a time when a lot of people would have wilted. We didn’t wilt, and our country didn’t wilt, and I’m very honoured to be your president.

Alas, he didn’t take questions, although that’s rather the point of a press conference.

Our US politics liveblog had all the details:

Boom! The New York stock exchange has opened higher, as investors welcome the jump in US employment last month.

Stocks are rallying, as Wall Street ignore the jump in Covid-19 cases that is forcing some Independence Day celebrations to be cancelled.

Here’s the early action:

• Dow: up 366 points or 1.4% at 26,601
• S&P 500: up 36 points or 1.1% at 3,152
• Nasdaq: up 114 points or 1.1% at 10,269 - record high

Evangelos Assimakos, Investment Director at Rathbone Investment Management, says traders need to bear in mind the challenges ahead, and the risk of many more infections.

“The fall in the unemployment rate in the US to 11.1% reflects overall an improving, albeit slow, trend in the economy as lockdown continues to gradually lift.

However, with a jobless rate still over 10%, the US labour market faces a long road ahead to unravel the colossal damage wrought by the pandemic. Furthermore, these figures may be somewhat deceiving – in some states recovery has stalled because spikes in the virus have surfaced again causing a fresh wave of shutdowns and keeping layoffs elevated.

Ultimately, we find ourselves in a whipsaw market as the climate remains fragile and the world’s governments seek to balance protecting public health and helping their economies recover.”

Here’s a reminder of the jobs devastation caused by Covid-19:

Economists and investors agree that June’s US unemployment report is better than expected, showing that businesses returned to work as the Covid-19 lockdown was eased.

But they also warn that the worrying spikes in coronavirus cases since firms reopened could derail the recover. Here’s some reaction:

Richard Flynn, UK Managing Director at Charles Schwab:

“Today’s upbeat U.S. jobs report will build upon the market’s positive momentum from last month’s data. However, even if the number is trending lower, continued jobless claims over the past few weeks suggest that many job losses may become permanent as businesses struggle to reopen and unused resources and skills become outdated. It’s also possible that a labour market recovery may be further endangered by the latest spike in infection rates in various states.

A second wave of deaths could in turn lead to a second wave of decline for the economy, corporate earnings and the stock market.

Robert Alster, Head of Investment Services at wealth manager Close Brothers Asset Management

“US unemployment remains at historic high levels. But the data does appear to be improving, driven by the gradual reopening of the economy. However, the consequences of throwing open the shutters so eagerly are already being seen, with multiple states now battling a second wave of infections. As they beat a retreat to a more economically and socially restrictive framework, the reality of the situation is starting to bite even the most gung-ho of state Governors.

Josh Lipsky of the Atlantic Council:

“Today’s jobs report shows progress is being made, but American workers need a rescue plan. Otherwise, these gains can easily evaporate. Prolonged double-digit unemployment will leave scars on the US labor force that could take decades to heal. Congress can help by immediately eliminating the uncertainty millions of families are facing from the looming fiscal cliff at the end of this month.

“But an extension of the unemployment supplement and more aid to states won’t be enough. Without long-term thinking, the US will suffer rolling waves of recovery and recession.

“During the Spanish Flu, cities that reopened too soon suffered worse long-term economic consequences compared to those that stayed closed. Today, we are forgetting the lessons of history on a dangerous scale. Taken together, the combined GDP of California, Florida, and Texas make it the 3^rd largest economy in the world. We may have to shut down the engine again as these states experience an explosive growth of COVID cases. The entire global economy relies on America getting this right.”

Here’s my colleague Dominic Rushe on today’s jobs report:

US employers took back another 4.8 million workers last month as the coronavirus pandemic’s economic impact appeared to wane, marking the second consecutive month of jobs growth. But the latest figures are from before new surges in infections that threaten the fragile recovery.

The US Department of Labor announced on Thursday that the unemployment rate dropped to 11.1% in June from an initial estimate of 13.3% in May. The figure is still more than three times higher than the 3.5% unemployment rate in February before the US outbreak.

In a separate report the labor department said another 1.4 million Americans filed for unemployment benefits last week. In the last two weeks alone another 3 million Americans have filed for unemployment benefits.

The monthly figures are a snapshot of the second week of June when states across the US were reopening after weeks of lockdowns aimed at containing the spread of Covid 19. Leisure and hospitality gained 2.1m jobs in June, about two-fifths of all the gains, with employment in food services and drinking places up by 1.5m jobs.

More here:

Stock markets are pushing higher, as investors welcome the better-than-expected US jobs report.

In London the FTSE 100 is 75 points higher at 6232, a gain of 1.2%.

On Wall Street, the Dow Jones industrial average is up 416 points, or 1.6%,in pre-market trading.

Allianz’s Mohamed El-Erian tweets that the jobs report is ‘notably stronger’ than expected.

Although June’s Non-Farm Payroll is encouraging, the latest count of jobless claims is less upbeat.

Around 1.4 million Americans filed new initial claims for unemployment benefit last week. That’s more than expected, and shows that some firms may have been laying off staff again following the surge in coronavirus cases in several states.

The number of Americans who’ve been claiming unemployment benefit for at least a fortnight rose to 19.29 million -- a sobering reminder of the economic cost of the pandemic.

NEWFLASH: America’s economy created 4.8 million jobs in June, the latest Non-Farm Payroll shows.

This drags the US jobless rate down to 11.1%, down from 13.3%. Still worrying high, but a sign that America’s economy has been healing last month, at least before the spike in Covid-19 cases in recent days.

Economists had expected around 3 million new jobs to be created, so this is better than expected (although there was a wide range of forecasts...)

More to follow....

Today’s US jobs report will be eagerly awaited by investors, including the new army of day traders who have embraced stock trading since the pandemic began.

The market crash of February and March, and the strong rally in April and May, has encouraged many more people to try share trading. It’s been an exciting time to be a day trader, especially if you backed winners such as tech stocks - or bought travel companies at their March lows.

But there’s also a dark side to these online brokerage - it’s an open secret that most people eventually lose money when the markets turn against them.

The Financial Times has a very sad story today, about one day trader who tragically took his own life because he wrongly thought he’d amassed huge losses. Alex Kearns’ death is focusing attention on the need to reform these online trading sites.

Here’s the introduction to the FT’s article:

Alex Kearns was an ordinary 20-year-old. He played the trombone, studied at the University of Nebraska and, like millions of other Americans, traded stocks to pass the time or make some money when coronavirus shut down schools and workplaces. Unfortunately, his youthful dabbling ended in tragedy.

On June 12 back at home in Naperville, Illinois, Kearns took his own life, after believing he had lost nearly $750,000 in a soured options bet made on Robinhood, an online brokerage that has become emblematic of a new era in retail investing. In a note left for his family, Kearns said he had “no clue about what I was doing” and never intended to “take this much risk”.

Horrifically, it appears Kearns mistook the potential loss on one leg of an options trade for the outcome of the overall bet — wrongly believing that he had racked up a loss of $730,165. In fact, his account had a balance of $16,000.

Here’s the full piece.

Unemployment across the eurozone has risen, with women bearing the brunt of Covid-19’s impact on the economy.

The eurozone’s jobless rate rose to 7.4% in May, up from 7.3% in April. In the wider EU, it rose from 6.6% to 6.7%, as the coronavirus lockdown hit demand and forced many shops, offices and factories to close.

Eurostat, which calculates the data, shows how female workers were hit by the slump:

In May 2020, the unemployment rate for women was 7.2% in the EU, up from 6.9% in April 2020. The unemployment rate for men was 6.4% in May 2020, stable compared with April 2020.

In the euro area, the unemployment rate for women increased from 7.7% in April 2020 to 7.9% in May 2020 while it remained stable at 7.0% for men.

Bad news: UK business leaders are more pessimistic about the impact of the Covid-19 pandemic on jobs.

The Bank of England’s latest survey of chief financial officers from small, medium-sized and large companies found that they expect a bigger hit to employment than a month ago.

On average, they expect an 11% hit to employment by the end of the year, up from 10% a month ago.

The Decision Makers’ Panel survey also found that firms only expect sales to recover gradually this year, and are slashing investment plans.

The Bank says:

In the June DMP survey, businesses expected their sales in 2020 Q2 to be 38% lower than they would otherwise have been because of Covid-19, employment to be 8% lower and investment to be 38% lower.

Sales were expected to recover only gradually over the next year with the negative impact from Covid-19 lessening from 38% in 2020 Q2 to 26% in Q3, 16% in Q4 and 10% in 2021 Q1. Investment was expected to recover somewhat more slowly than sales, but was still on an upward trajectory. In contrast, the impact on employment in Q2 was expected to be more persistent than the impact on sales, with the hit to jobs rising a little in Q3 and Q4, when it peaks at 11%, and falling back only a touch in 2021 Q1.

Stock markets across Asia-Pacific have rallied today as investors anticipate a strong US jobs report later today.

Shares jumped in China, Australia and South Korea, lifting markets in the region towards four-month highs.

Hopes of a Covid-19 vaccine are also cheering investors. As we covered yesterday, Pfizer reported encouraging initial results from human trials of its coronavirus vaccine, developed with Germany’s BioNTech.

It’s still early days, based on a small trial. But as Pfizer research Phil Dormitzer told ABC News, the preliminary results are very exciting.

Our first vaccine candidate is eliciting antibody levels to neutralize the virus that is equivalent to or better than what you see in people who have had COVID-19.”

“It’s been a tremendous amount of work and there’s now a lot of pride to see the results start to come forward.

The potential is there to actually change a lot of people’s lives.”

Investors got the message:

• China’s CSI 300: up 1.95%
• Australia’s S&P/ASX 200: up 1.6%
• South Korea’s KOSPI Index: up 1.3%

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.

There are two schools of thought around today. One holds that the latest US unemployment report will give a crucial insight into the state of America’s economic recovery.

After all, June’s Non-Farm Payroll is expected to show record-breaking job creation - perhaps as many as three million, pulling the jobless rate down from 13.3% to 12.3%.

That would show that firms are getting back to work, heralding a rapid recovery from the Covid-19 recession.

As Stephen Innes of AxiCorp puts it:

I do not think we can overemphasize the importance of Thursday’s NFP bridging the disconnect between improving cyclical data (i.e., PMIs) and a lackluster medium-to-long-term economic prognosis as persistently negative yields would lead one to believe.

A better-than-expected outcome could go some way to settling the near-term debate that the US labor market will heal relatively quickly and justify new highs in US equities.

But there’s another view -- that the worrying spike in coronavirus cases across America in recent days means June’s NFP could already be dated. Overnight, 50,000 new cases were reported on Wednesday, a new record high.

More than half of new U.S. cases each day are in Arizona, California, Florida and Texas, forcing those states to shutter some non-essential businesses again, undermining the economic recovery in a bid to safe lives.

California governor Gavin Newsom ordered bars to close and banned indoor dining in many parts of the state, saying:

The bottom line is the spread of this virus continues at a rate that is particularly concerning,”

Mohamed El-Erian, chief economic advisor at Allianz, fears some parts of the US economy are going into reverse:

Either way, June’s Non-Farm Payroll will probably be the biggest story in the markets today. It normally comes on a Friday, but has been brought forwards because Friday is a US holiday (for the 4th July celebrations).

Potentially confusingly, we also get the latest weekly US unemployment figures today - they’re expected to show that another 1.3m people signed on for jobless support last week.

The agenda

• 8am BST: Spanish unemployment report for June
• 9am BST: Italian unemployment report for May
• 1.30pm BST: US Non-Farm Payroll for June
• 1.30pm BST: US initial jobless claims