James Knightley, chief international economist at ING, has sent us his thoughts on the US jobs numbers.

The January jobs report is weaker than anticipated, but we are hopeful that this will mark the low point for 2021 job creation. Business surveys are offering encouragement and low hopsitalisation rates are allowing a partial re-opening in many states. With progress being made on vaccinations, much stronger jobs figures are likely from 2Q onwards...

That said, we aren’t going to get meaningful improvements in the labour market until Covid containment measures are lifted on heavily impacted sectors such as travel, leisure and hospitality. That is likely to be several months away so vaccine performance and vaccination rates are critical for the outlook.

The S&P 500 and the tech-heavy Nasdaq have hit fresh record highs on Wall Street.

The S&P 500 rose 17 points, or 0.45%, to 3,889 just after the open while the Nasdaq climbed 47 points, or 0.34%, to 13,824. The Dow Jones rose 38 points, or 0.12% to 31,093.

The market seems to like the US jobs numbers.

The S&P 500 and the Nasdaq are set to open at record highs, after the jobs data confirmed that the labour market is stabilising, and the Senate narrowly approved a budget plan allowing the passage of Joe Biden’s $1.9 trillion Covid-19 aid package in the coming weeks.

And on the vaccine front, the drugmaker Johnson & Johnson said it had asked the US regulator to approve its single-shot Covid-19 vaccine, which had a 66% rate of preventing infections in its large global trial.

Trading on Wall Street starts in just over 20 minutes.

Here is some reaction to the US non-farm payrolls data. Despite the 49,000 increase in jobs in January, there are almost 10 million fewer Americans in jobs than this time last year.

Richard Flynn, UK managing director at the US bank Charles Schwab, says:

Today’s US jobs data will come as positive news for markets following December’s disappointing numbers. However, though there are some bright spots, US payrolls still have meaningful ground to make up, as we’re still almost 10m jobs short of pre-pandemic levels.

While it is too soon to tell whether permanent job losses have peaked, as long as they don’t reaccelerate, the “scarring” effect on the economy should be reduced.

With vaccine distribution picking up, prospects for getting the pandemic under control are improving. There still appears to be a long way to go, but good progress on getting large numbers of people vaccinated is being made, which should allow hard-hit sectors of the economy to begin recovering. Once it is safer for people to congregate, sectors like travel and hospitality, restaurants and bars, and schools can begin to return to normal activity. Stronger employment growth should follow.

James Ingram, investment manager at the fund manager MB Capital, says:

It would have been nice if the payroll figures taken from January data to kick off the year had defied expectations and started on a positive note but unfortunately the number comes in line with expectations that were already low.

We however expect the market to push this aside and look for positivity from the following three areas; fiscal stimulus, successful vaccine rollout and companies’ earnings. Investors are buying into the change in strategy with Biden at the helm and they are comforted by his stance of taking the situation and the threat of covid much more seriously than Trump appeared to.

The US economy added back 49,000 jobs last month as coronavirus restrictions eased and fiscal stimulus from Washington goosed up the economy, the labor department announced today, writes Dominic Rushe in New York. The unemployment rate dropped to 6.3%, down significantly from its pandemic high of 14.7% in April.

While January’s figure marked a return to growth after job losses in December, the number was weak and big problems remain.

Here is our full story on the US jobs data:

The US Bureau of Labor Statistics says:

In January, notable job gains in professional and business services and in both public and private education were offset by losses in leisure and hospitality, in retail trade, in health care, and in transportation and warehousing.

However, the jobless rate dropped to 6.3% from 6.7% in December – this is better than expected.

While we are waiting for the US non-farm payrolls data (we are expecting a 50,000 increase in jobs in January), let’s take a quick look at the markets.

• FTSE 100 up 0.06% at 6,507
• Germany’s Dax up 0.19% at 14,086
• France’s CAC up 1% at 5,664
• Italy’s FTSE MiB up 1.45% at 23,231

Oil prices are also pushing higher and are near a one-year high, bolstered by Opec production cuts and hopes of economic recovery on the back of the Covid-19 vaccination programmes. Brent crude, the global benchmark, has gained 55 cents, or 0.95%, to $59.40 a barrel, while US crude is 48 cents ahead at $56.71, a 0.89% gain. Earlier oil was up by more than 1%.

Fears over mutant strains in Covid-19 could depress some types of consumer spending in the UK after the current lockdown is eased, one of the Bank of England’s most senior officials, has warned – although he still expects a strong bounceback in consumer spending overall once government restrictions are relaxed.

Ben Broadbent, deputy governor for monetary policy, said lingering fears over new coronavirus variants could deter people from making some spending decisions later this year after the government’s restrictions have been relaxed, our economics correspondent Richard Partington reports.

Warning that some sectors of the economy where social interaction could face weaker levels of demand for goods and services, he told CNBC:

One hopes that we now have pretty good data on infection rates including identification of any new variants, but those fears could well linger.

One hopes that we now have pretty good data on infection rates including identification of any new variants, but those fears could well linger.

I can certainly see why people might be fearful to spend on particular things, things that expose them to the risk of infection. And as you say, some of those fears may linger even after vaccination.

Despite striking a note of caution, Broadbent said he still anticipated a strong recovery in consumer spending this summer as Covid restrictions are wound down, helping to power an economic recovery from the pandemic.

Highlighting a boom in economic activity after the relaxation of lockdown last summer, he said:

Overall spending does come back pretty strongly when you remove these caps, at least initially.

So we have certainly allowed for some lingering concerns. But that doesn’t mean that consumption overall won’t recover quite strongly, at least initially, once you start loosening the restrictions. That was exactly the experience we had last year.

Banks in Britain have so far been shielded from the worst effects of the pandemic by government relief measures, and the toughest time has yet to come, Bank of England deputy governor Sam Woods said today.

Government measures such as the furlough scheme and guarantees on loans from banks to companies will be wound down in coming months.

Woods, who is also head of the Prudential Regulation Authority, which oversees the UK banking and insurance sectors, said at an online German symposium, held by the London School Economics:

We feel good about what’s happened so far but in a way the tougher bit is coming. The government has pushed out a lot of stress in time, but some will still come through.

The other big news is that all adults aged 50 and over in the UK will get their first dose of a coronavirus vaccine by May, according to the Cabinet Office. You can read more on our coronavirus live blog:

AstraZeneca has received another shot in the arm: UK regulators say extra trial data from the company suggests that the Covid-19 vaccine the drugmaker developed with Oxford University is effective in elderly people.

Britain is giving the shot to all age groups after it was approved in December, but some European countries, including Germany, want to see more data before giving it to those over 65. The reason: the vaccine was tested on a smaller number of older people in clinical trials, versus younger people.

Munir Pirmohamed, chair of the Commission on Human Medicines’ Covid-19 Vaccines Benefit Risk Expert Working Group, said UK regulators had noticed the smaller number of over-65s in the data when they approved the vaccine. In response to a question from Reuters about the efficacy of the shot in the elderly at a briefing held by the Medicines and Healthcare products Regulatory Agency, he said:

Nevertheless, there was no evidence there, suggesting that those people over 65 were not getting evidence of efficacy.

Since then, we’ve seen more data coming through from AstraZeneca as more people are completing the trial, which highlights again that efficacy in the elderly is seen, and there’s no evidence of lack of efficacy.

He added that elderly people were generating strong immune responses to the vaccine.

On Tuesday, Oxford University published analysis of fresh data from three trials, which found that a single dose of its vaccine conferred an average 76% protection against Covid-19 for at least three months and cut transmission of the virus by 67%.

Sterling has also had a good week and is on track for its fourth week of gains. It is edging higher against both the dollar and the euro after the Bank of England put negative interest rates on the back burner. The central bank told banks to prepare for a potential cut below zero in six months’ time.

The pound is 0.2% higher against the dollar at $1.3689, and is trading 0.05% higher against the euro at €1.1432.

The drop in UK house prices recorded by Halifax in January mirrors that reported by Nationwide building society – the two closely watched house price surveys – and suggests that the turn of the year coincided with a change of momentum in house prices.

Andrew Wishart, property economist at the consultancy Capital Economics, says prices are likely to drop back this year as the stamp duty holiday ends on 31 March and unemployment continues to rise.

With both Halifax and Nationwide recording a drop in January, the looming end of the stamp duty holiday in March appears to be reversing the 2020 house price surge. Both indexes are based on mortgage approvals, which are normally secured about two months before completion. Very high transaction volumes have led to delays in conveyancing, so the drop in prices probably reflects the increasing likelihood that those at the approval stage of the home moving process will miss out on the tax saving.

It is highly uncertain how protracted and severe the drop in house prices will be. We think that the withdrawal of policy support and rising unemployment will cause house prices to slip back for much of the year. But our forecast that Bank Rate will stay at 0.10%, ensuring mortgages remain affordable, and that the economy will recover swiftly as Covid-19 restrictions are eased should mean that house prices stabilise by the end of the year and increase again in 2022. We have pencilled in a 4.0% drop in house prices in 2021, followed by an 2.5% rise in 2022.

Back to our main story about Ofgem’s decision to lift the cap on energy prices, which will put £96 on households’ bills, to £1,138. The price comparison website MoneySuperMarket says there are 80 tariffs cheaper than the regulator’s new benchmark.

In Asia, shares in the Chinese video app Kuaishou nearly tripled on the first day of trading in Hong Kong, giving TikTok’s chief rival a market value of $180bn, Mark Sweney reports.

The debut of the short form video site on Hong Mong’s stock exchange on Friday has been one of the most eagerly-anticipated initial public offerings this year and raised $5.4bn (£4bn). The company’s stock jumped 194 per cent in early trading on Friday at HK$338 from the initial public offering price of HK$115.

Kuaishou, which made a $1.1bn loss last year, competes in China with ByteDance, the owner of TikTok and its Chinese sister app Douyin. The company says that it has around 300 million daily active users, who spend an average of 86 minutes or more on the app.

The company makes money from activity including taking a small cut of the “tips” users leave for the creators that make content they particularly like, which come in the form of virtual gifts such as small digital “stickers” of objects, which accounts for about 62 per cent of total revenues. I

t also makes money from livestreaming e-commerce, sometimes fronted by celebrities to try and attract more buyers, as well as online buyers. Kuaishou’s revenues grew from $1.3bn in 2017 to $6.2bn in the nine months ended September 30, 2020, however it still reported a loss of $1.1bn.

The struggling clothing retailer French Connection has received two separate takeover offers from potential suitors, reports my colleague Mark Sweney.

The company, which unsuccessfully sought to find a buyer in 2019, said it has been approached by the retail investor Spotlight Brands, with backing from the restructuring and investment firm Gordon Brothers.

The second approach has come from the brand investment platform Go Global Retail, in conjunction with HMJ International Services. French Connection said any offer is likely to be in cash, and cautioned:

Discussions with both Spotlight and Go Global remain at a very early stage. Accordingly, there can be no certainty that an offer will be made, nor as to the terms on which any offer might be made. Further announcements will be made as appropriate in due course.

In other news, the US drugmaker Johnson & Johnson has asked US regulators to approve its Covid-19 vaccine, which unlike other vaccines is a single shot, and would boost scarce supplies.

Last week, J&J said the vaccine had a 66% rate of preventing infections after being tested on thousands of volunteers in a large global trial.

European stock markets have opened flat to slightly higher. The cautious open comes after a good week for the main indices, with the FTSE 100 in London on track for a weekly gain of 1%.

• UK’s FTSE 100 flat at 6,503
• Germany’s Dax flat
• Spain’s Ibex up 0.16%
• Italy’s FTSE MiB up 0.32%

Here is our full story on the rise in UK energy bills:

Natalie Hitchins, head of home products and services at the consumer group Which?, says energy customers “will be left reeling by this increase to the price cap which allows suppliers to raise the prices of their default tariffs to where they were before the pandemic”.

Anyone struggling with their energy bills this winter should contact their provider for help. Energy suppliers must also continue to ensure support is easy for consumers to access.

Customers on standard or default tariffs who want to avoid a price hike should switch to a different provider or deal as this remains the best way to keep your bills down. Do your research, shop around and switch - you could find a deal £260 cheaper than the new price cap level.

And Citizens Advice notes that the energy price increase will coincide with a change in universal credit. Alistair Cromwell, acting chief executive of the consumer group, says:

This increase will be a heavy blow to a lot of households. For many people on Universal Credit it will come at the same time as the £20 a week increase to the benefit is set to end.

With a tough jobs market and essential bills rising, now is not the time for the government to cut this vital lifeline.

The Ofgem announcement is here.

Richard Neudegg, head of regulation at Uswitch.com, says:

The price cap increase is an aftershock of last year’s lockdown, partly because many customers have struggled to pay their energy bills, plunging them into debt that suppliers have been unable to recover.

With more of us at home, usage remains high and energy costs hike, there’s a very real danger that the rising price cap will end up trapping households on default tariffs into a vicious circle of energy debt.

The good news is that there are plenty of fixed deals available that would protect households from market volatility and provide not just certainty and reassurance, but significant cost savings.

He said the best value fixed deal currently available on the market is £945 from Avro Energy, while the new price cap will sit at £1,138, for typical usage. This means that by switching, households could save themselves £193 across their annual energy bills.

Peter Earl, head of energy at the price comparison site comparethemarket.com, is not impressed with Ofgem’s move. He has urged households to check their tariffs, saying that they could potentially save hundreds of pounds by switching supplier.

Raising energy costs for millions of households by an average of £96 is an extraordinary move in the current environment. It calls into question the whole point of a price cap which was designed to protect the most vulnerable households.

Many are already struggling with the financial impact of the pandemic – our research shows that nearly three out of 10 (29%) families with children at home struggle to pay their bills every week - and this announcement coincides with the shock of energy bills being received after a winter spent in lockdown.

The additional £23 hit announced earlier this week to recover the costs of unpaid bills in the cap’s ‘Adjustment Allowance’ ignores the fact that many are still in a very difficult and precarious financial situation. It undoes the good work by the industry in supporting customers through the pandemic, which is far from over.