Every week here at the Current we bring you the world’s biggest business stories. This week: the US and Canada both add jobs, Chipotle’s shareholders sue, oil prices fell further and a turbulent trading week in China reverberating around the world.
US Adds Jobs
Job growth in the US continued to hold strong as the economy added 292 000 jobs in December. According to the Bureau of Labour Statistics the increase did not shift the unemployment rate which remained at a 7 ½ year low of 5%. Professional and business services, construction, and healthcare all saw jobs increase while some sectors, like mining, lost 8 000 jobs. In response to greater job growth the Fed raised interest rates last month to between 0.25% and 0.5%.
Canada adds jobs
Canada added 22 800 jobs in December, bringing 2015’s total to 158 000, but the unemployment rate still remains at 7.1%. Many analysts had predicted a contraction of 10 000 jobs. Every province other than Ontario lost jobs and the new jobs which were created were almost all self-employed or part-time jobs, considered lesser quality with lower salaries.
Chipotle Mexican Grill, famous for their burritos, is being sued by investors due to an E. coli outbreak. The lawsuit asserts that the restaurant chain failed to take the necessary precautions to safeguard customer and employee health. As a result of the outbreak share prices have fallen 35% since October and in store sales are down 30% in December. A federal criminal probe has also been launched in relation to the outbreak. Chipotle has already announced that it will change its practices to minimise the risk of future outbreaks.
Oil Prices Fall
Oil prices fell below $33 on Thursday as US energy stockpiles grew and China’s currency became weaker. Brent crude fell 4.7% to new 11 year lows while US crude fell by 3.9% to the lowest levels since 2008. Since June 2014 oil prices have fallen 70%. The oil oversupply has reached the point that countries around the world have run out of places to store it. The loonie, which is tied closely to oil prices, fell to 70.67 cents on midday Friday.
Global markets lost over $2.5 trillion (US) this week, the worst start to a year since the dotcom crash of 2000. On January 4 and 7th the Chinese stock market fell by about 7% before a ‘circuit-breaker’ halted trading after just 30 minutes. China has since said that the ‘circuit-breaker’ system has been scrapped to allow for greater market freedom. Earlier in the week, the People’s Bank of China allowed the yuan to fall by the largest amount in five months, before raising its guidance rate.
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