Time to wrap up!

Hiring held firm in the US last month, official data showed, amid uncertainty over the strength and direction of the world’s largest economy.

Employers added 50,000 jobs to the US labor force last month, capping the weakest year of growth since the pandemic, according to data released from the US Bureau of Labor Statistics on Friday.

The closely watched reading was slightly shy of the approximately 73,000 jobs economists expected to be added in the US economy in December.

Previous readings for October and November were also revised lower, with the BLS now estimating that the US added 76,000 fewer jobs during those two months. In October, during the longest US government shutdown in history, the US economy shed 173,000 jobs.

The unemployment rate, which rose to a four-year high of 4.6% in November, fell back to 4.4% in December.

Economists predicted that a cut to US interest rates this month was very unlikely, given the drop in the unemployment rate.

In other news…

Rio Tinto and Glencore have restarted talks over a merger that would create the world’s largest mining company.

The talks come almost a year after previous discussions between the two mining companies collapsed. If a deal is agreed, it would create a global mining business with an enterprise value of more than $260bn (£193bn).

Sainsbury’s has blamed “significant headwinds” from weak consumer confidence, heavy online competition and widespread discounting for a fall in sales at its Argos chain over the all-important Christmas quarter.

The Charity Commission has opened a statutory inquiry into City & Guilds’ sale of its qualification awards business to a private company last year.

The announcement has been made after the Guardian revealed last month how City & Guilds bosses were handed million-pound bonuses after the charity privatised its business arm.

Back in the financial markets, oil has hit its highest level in a month.

US crude is up almost 3% at $59.43 a barrel, the highest since 8 December.

Brent crude, the international benchmark, is up 2.5% at $63.47 a barrel.

Both measures also jumped yesterday, as protests spread in Iran.

Charalampos Pissouros, senior market analyst at Trading Point, says:

Oil prices rebounded strongly on Thursday as tensions in Iran flared up, raising concerns about Iranian oil output. A nationwide internet blackout was reported yesterday, as protests over economic hardships continued.

However, oversupply concerns remain as there is no limitation on how much Venezuelan oil will be sold in the foreseeable future, at a time when global inventories continue to rise. So, unless the situation in Iran escalates to something bigger, the rebound in oil prices is likely to remain limited and short-lived.

Alas, we’re not going to get a ruling over the legality of Donald Trump’s trade wars today.

The U.S. Supreme Court will not issue a ruling on Friday in a major case which could test the legality of the sweeping global tariffs announced by President Donald Trump last year.

Today had been identified as the first day that the SCOTUS might give its ruling on whether the international Emergency Economic Powers Act (IEEPA) permits the imposition of widespread tariffs

US ‘prediction’ markets suggest there’s roughly only a 25% chance that SCOTUS will back Trump, when the decision comes, and a 75% probability that they will rule against the White House.

Consumer confidence has risen across America this month, despite lingering concerns about inflation and the jobs market.

The University of Michigan’s Index of Consumer Sentiment has risen to 54.0 this month, up from 52.9 in December. That’s its highest reading since last September.

Surveys of Consumers director Joanne Hsu explains:

Improvements in January were seen among lower-income consumers, while sentiment fell for those with higher incomes. All told, while consumers perceived some modest improvement in the economy over the past two months, their sentiment remains nearly 25% below last January’s reading.

They continue to be focused primarily on kitchen table issues, like high prices and softening labor markets. Although consumers’ worries about tariffs appear to be gradually receding, they remain guarded about the overall strength of business conditions and labor markets.

More than 90% of interviews for this release were collected prior to the capture of president Maduro in Venezuela, so we can’t yet see what impact that has had….

Today’s drop in the US unemployment rate means there’s almost no chance of a cut to interest rates this month, argues Seema Shah, chief global strategist at Principal Asset Management, said:

“The prospect of a January Fed rate cut has all but vanished following the unexpected drop in the unemployment rate. It is now difficult to argue that the labour market is collapsing and in urgent need of monetary support.

However, the picture remains far from clear: payroll growth undershot expectations, and downward revisions to prior months have pushed the three-month moving average into negative territory. While a tighter labor supply may explain part of the dynamic, sustained job losses hardly inspire confidence.

The U.S. economy likely requires additional support from the Fed — just not immediately.”

More than half of the 50,000 jobs created in the US last month were at food services and drinking places, where payrolls rose by 27,000.

Health care continued to add workers in December; payrolls rose by 21,000, including 16,000 in hospitals.

Employment in social assistance rose by 17,000.

But it was a tougher jobs market in retail, where 25,000 jobs were cut.

Federal government employment rose by 2,000, suggesting that the Doge jobs cull may have abated – after 277,000 jobs were lost through 2025

America’s jobless rate has fallen, to 4.4% in December, down from 4.5% in November (which I think has been revised down from 4.6%)

Today’s employment data shows that the unemployment total dipped from 7.781m in November to 7.503m in December.

The number of people employed rose, month-on-month, but the labor force participation rate dipped from 62.5% to 62.4%, implying more people were neither in work nor looking for a job.

We can also see today that much fewer jobs were created in Donald Trump’s first year than the final year of Joe Biden’s administration.

The Establishment Survey Data released by the Bureau of Labor Statistics today shows that payroll employment rose by 584,000 in 2025, which is an average monthly gain of 49,000.

That’s rather less than the increase of 2.0 million in 2024 (an average monthly gain of 168,000).

Oof! It now appears that many more jobs were lost in October than first estimated.

Today’s jobs report shows that nonfarm payroll employment in October fell by 173,000, much worse than the estimate of 105,000 job losses.

That’s partly because many federal employees took deferred buyout offers from the Trump administration and were paid at the end of September, meaning they dropped out of the non-farm payroll in October.

So, with 8,000 fewer jobs created in November than previously thought, that means employment in October and November combined is 76,000 lower than previously reported.

Newsflash: The US economy added fewer jobs than expected last month.

America’s non-farm payroll rose by 50,000 in December, missing forecasts of a 60,000 rise.

Employment continued to trend up in food services and drinking places, health care, and social assistance, the Bureau of Labor Statistics reports, while retail trade lost jobs.

That shows a hiring slowdown, compared with the previous month; the BLS now estimates that 56,000 jobs were created in November, 8,000 fewer than its first estimate of 64,000.

Back in the UK, the Charity Commission has opened a statutory inquiry into City and Guilds of London Institute, following reports in the Guardian about the sale of its training and awards business.

The Commission says the inquiry will examine information provided ahead of the sale, “following concerns raised in public reporting relating to the sale and bonuses awarded to its executives”.

Last month, my colleague Simon Goodley reported that two City & Guilds executives have each been awarded million-pound bonuses and sizeable salary increases following the sale of its training and awards operation, City & Guilds (C&G), to PeopleCert.

The Commission will also look into the trustees’ decision-making regarding the sale and entering into a ‘coexistence agreement’ with the new company.

The financial markets are limbering up for the final, and most important, major economic news of the week – the US jobs report for December, due in half an hour’s time.

Economists predict that December’s non-farm payroll report will show that the US economy created around 60,000 new jobs last month.

That would be a slight slowdown on the 64,000 added in November, but rather better than October’s shockingly bad report, which showed 105,000 jobs were lost!

The non-farm payroll could shift market expectations around the US’s growth prospects, and the likelihood of interest rate cuts this year.

It should also give us a better insight into the health of the economy, after last autumn’s shutdown disrupted the usual flow of economic data.

Julien Lafargue, chief market strategist at Barclays, says:

“Revisions to prior months will also be closely scrutinised as the impact of the US government shutdown continues to be felt. Ultimately this report is just one piece of a puzzle that also includes inflation and an upcoming decision by the US Supreme Court on reciprocal tariffs.

As such, we doubt it will be enough to significantly alter the current narrative that the US Federal Reserve will remain on pause through Q1.”

European nations have backed the biggest ever free trade agreement with a group of South American countries, ending 25 years of negotiations but risking further tensions with farmers around the bloc.

France, Poland, Austria, Ireland and Hungary opposed the deal in the face of protests from the agricultural sector, but Italy dropped its opposition allowing the landmark deal to be adopted under the majority voting system.

The deal with Brazil, Argentina, Paraquay and Uruquary, must still get the approval of the European Parliament but bar any major U-turns by member states, it could be signed off as early as next week by European Commission president Ursula von der Leyen.

The European Commission which concluded negotiations a year ago had hoped to get the deal over the line at the European Council summit but it was pulled from the agenda at the last minute after opposition by France and Italy, two of the bloc’s biggest agricultural producers.

On Thursday night French president Emmanuel Macron announced it would vote against the deal after farmers rolled into Paris on tractors in the latest protests against the pact which they fear will flood the bloc with cheap and substandard meat.

A senior European Commission official described Ireland’s decision to also vote against the deal as “disappointing” claiming the country’s concerns had been address.

Belgian abstained from the vote, reflecting differences in the federal government.

Supporters of the deal say it will help the EU diversify and compensate for the new trade barriers erected by Donald Trump and lower tariffs on the equivalent of just 1.5% of beef produced in the EU.

It will see import duties phased out on 91% of EU goods and allow freer access to critical raw materials like lithium needed for batteries in the European car industry.

The German federation of industries has welcomed the Mercosur deal saying it is an important day for the Germany and European economies showing that the “EU can be a relevant geostrategic actor”.

The boss of supermarket chain Sainsbury’s has predicted that food inflation will continue to fall in 2026.

Following this morning’s Christmas trading update, Sainsbury’s CEO Simon Roberts told reporters:

“We’ve seen food inflation come down and when you think about the outlook for the year ahead we’d expect that to continue,”

Roberts said that commodity prices were likely to be more stable in 2026 – speaking shortly before the UN reported that global food prices had dropped again in December (see previous post).

Global food prices have fallen again, offering some hope to families around the world struggling with the cost of living.

The United Nations’ monthly Food Price Index shows that average price fell by 0.8% month-on-month in December, pulled down by dairy products, meat and vegetable oils which offset increases in cereals and sugar.

Following falls in recent months, the index is now 2.3% below its level one year ago, and 22.4% below the peak reached in March 2022, after Russia invaded Ukraine.

The report shows that dairy prices fell by 4.4% in December, with butter prices fall sharply, driven by seasonally higher cream availability in Europe, while ehole milk powder (WMP) prices also declined, reflecting peak seasonal milk output in Oceania.

Meat prices fell 1.3% in the month, but were still 3.4% above their level a year ago.

The UN says prices declined across all meat categories, with those of bovine and poultry meats falling the most, adding:

Lower world bovine meat prices reflected weaker quotations in Australia, where seasonally dry conditions prompted herd destocking, increasing cattle availability for slaughter and exerting downward pressure on prices. International poultry meat quotations declined, as ample exportable supplies outweighed global import demand. Ovine meat prices eased marginally amid larger seasonal supplies entering the market, despite continued solid global import demand. Pig meat prices decreased slightly, led by weaker quotations in the European Union amid subdued global demand.

Vegetable oil prices fell 0.2% in December to a six-month low, due to lower world prices of soy, rapeseed and sunflower oils.

Global soyoil prices declined on ample export supplies from the Americas, while larger rapeseed outputs in Australia and Canada exerted downward pressure on rapeseed markets, the UN says, while there was “sluggish” demand for sunflower oil.

But, cereal prices rose by 1.7%, amid renewed concerns over Black Sea exports as the Russia-Ukraine war continued.

Sugar was pricier too, with prices up 2.4%, due to a sharp drop in sugar production in Brazil’s key southern growing regions.

News of the potential mega-mining deal involving Rio Tinto and Glencore is sending ripples though the London stock market.

UPDATED: Shares in Glencore, which would probably be acquired if a deal goes though, jumped by more than 6% in early trading, and are now up 8%.

Rio Tinto, the likely buyer if a deal is reached, are down 2.6%

Other mining stocks are also up this morning; copper producer Antofagasta has gained 1.5% while Anglo American (involved in its own takeover, of Canada’s Teck) has gained 0.5%.

So overall, the FTSE 100 share index is up 0.25% or 24 points at 10,069 points.

Derren Nathan, head of equity research at Hargreaves Lansdown, says:

“Last year’s theme of consolidation in the natural resources sector has shown no sign of let up in the early part of 2026. In the same week we’ve seen Chevron make a swoop for Lukoil’s non-Russian fossil fuel assets, Rio Tinto and Glencore have confirmed that the mother of all mining deals could be back on the table.

Details are thin on the ground, but a deal could see Rio scoop up some or all of Glencore’s assets. A full combination would create a global leader in multiple industrial metals including iron ore and transition metals such as copper, cobalt and lithium. But M&A isn’t an automatic path to extracting value for investors, with Rio’s Australian shares down 6% and Glencore ending Thursday in negative territory. Under the UK’s takeover code, the management teams now have until 5^th February to outline a compelling case for both sets of shareholders.

The diverse asset base and likely synergies have the potential to provide further protection against commodity price fluctuations, but just how Glencore’s coal and trading arms fit in with Rio’s business model, and push for improved sustainability credentials, are key questions to answer.”

UK supermarket chain J Sainsbury appears to have disappointed the City with its Christmas trading performance.

Shares in Sainsbury’s have dropped by almost 4% at the start of trading in London, after the company reported weaker-than-expected sales growth over the crucial festive period.

Like-for-like sales excluding fuel across the company, which includes Sainsbury’s supermarkets and the Argos catalogue chain, rose 3.4% in the last quarter (to 3 January), below analyst forecasts according to Bloomberg.

Simon Roberts, chief executive of J Sainsbury, says the company won grocery market share for the sixth consecutive Christmas period, adding:

Fresh food sales grew by 8% and Taste the Difference was the fastest growing Premium Own Label brand in the market, with our best ever ranges of Christmas innovation driving Taste the Difference Fresh sales growth of 15%.

Grocery sales at Sainsbury’s supermarkets rose by 5.4% in the quarter, but general merchandise and clothes sales fell by 1.1%.

Argos also struggled, with its sales falling by 1% in the quarter.

Roberts insists Argos is making progress, telling the City:

The Argos transformation plan continues to make progress, delivering volume growth across the whole quarter despite significant headwinds from online traffic trends, a tough and promotional general merchandise market and weak consumer confidence.

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

Talks are underway to create the world’s largest mining company.

Rio Tinto is in talks to buy rival Glencore, a move which could create a company with a combined value of over $200bn (£152bn).

The two companies confirmed in statements overnight that they have been discussing a potential combination of some or all of their businesses, which could include an all-share takeover.

Both companies hold significant copper mines, which are profiting from prices hitting record levels; a combination could create a powerful rivalt to the world’s largest miner, BHP Group.

Glencore told shareholders:

Glencore notes recent media speculation and confirms that it is in preliminary discussions with Rio Tinto plc and Rio Tinto Limited about a possible combination of some or all of their businesses, which could include an all-share merger between Rio Tinto and Glencore

The parties’ current expectation is that any merger transaction would be effected through the acquisition of Glencore by Rio Tinto by way of a Court-sanctioned scheme of arrangement.

Rio Tinto confirmed that the two companies have been “engaging in preliminary discussions about a possible combination of some or all of their businesses”, and that any merger transaction would involve it buying Glencore.

The two companies have previous; back in 2014, Rio rejected a merger approach from smaller rival Glencore.

The mining sector is no stranger to talkover talks, and indeed failed approaches! BHP has been rebuffed in its attempts to take over rival miner Anglo American, which is itself taking over Teck Resources.

The agenda

• 7am GMT: German trade and export data

• 9am GMT: UN food price inflation report

• 1.30pm GMT: US non farm payrolls

• 3pm GMT: University of Michigan’s US consumer confidence report