By Suban Abdulla

LONDON (Reuters) - British employers reduced the number of new permanent staff they hired through recruitment agencies by the most since mid 2020 last month due to concerns about the economic outlook, adding to signs that the market is becoming tougher for job seekers.

A gauge of permanent staff hiring by the Recruitment and Employment Confederation and accountants KPMG fell to 42.4, the lowest since the 34.3 in June 2020 when the country was in lockdown due to the COVID-19 pandemic.

The survey's measure of temporary staff hiring, which often rises when employers are cautious about the outlook, in July showed the weakest growth in nine months - partly because more workers were looking for the security of permanent roles.

Neil Carberry, chief executive of REC, said the jobs market remained "fairly robust" despite the slowdown in permanent placements.

"To some extend this is normalisation as the post-pandemic boom abates, but it is also driven by uncertainty," he said.

While starting pay for new permanent staff rose sharply by pre-pandemic standards, the rate of wage growth was the lowest since April 2021, REC said.

Claire Warnes, partner of skills and productivity at KPMG UK, said competition for skilled workers and cost of living pressures were keeping starting salaries high.

Monday's survey chimed with other indicators showing the labour market is loosening, welcome news for the Bank of England which raised interest rates for the 14th meeting in a row to 5.25% last week and has been concerned about high wage growth.

Official data showed unemployment rose to 4% in the three months to May, a 16-month high, although annual wage growth remained at a record high of 7.3% in cash terms.

Separate figures from accountants BDO showed rising interest rates, tough trading conditions and weak demand hit hiring intentions and business confidence across services and manufacturing sectors.

BDO's employment index fell for the first time in six months in July and its optimism gauge declined for the first time in four months.

REC said the availability of both temporary and permanent workers to fill jobs hit the highest since December 2020.

Investing.com -- All eyes will be on the U.S. in the coming week as inflation data is released. GDP data out of the U.K. will show how the economy is holding up in the face of continued rate hikes. Data out of China could point to deflation risks in the world’s number two economy. Here’s what you need to know to start your week.

U.S. inflation data

The U.S. is to release July inflation data on Thursday which will show whether price pressures are trending down and if markets are correct in believing that the Fed is close to ending its aggressive cycle of interest rate hikes.

Lower numbers would make it more likely that Fed policymakers will hold off raising interest rates at their upcoming September meeting after a quarter-percentage-point hike last month.

On Friday, the U.S. is to release July PPI data, with core producer prices expected to rise by 2.3% from a year earlier.

Investors will also get to hear from several Fed officials during the coming week with Philadelphia Fed President Patrick Harker, Atlanta Fed President Raphael Bostic and Fed Governor Michelle Bowman making appearances.

Pause in stock market rally

Wall Street closed broadly lower on Friday and weekly percentage declines for the S&P and Nasdaq were the biggest since March as some investors locked in profits after five months of gains.

The near-term trajectory for equities could depend on whether Thursday’s inflation data shows consumer prices moderating. Investors are also closely watching the path of Treasury yields, which rattled markets in recent days by rising to fresh year highs following a downgrade of the U.S. credit rating by Fitch.

Rising yields on Treasuries, viewed as among the world's safest investments because they are backed by the U.S. government, can dampen demand for stocks.

Friday’s U.S. employment data showed that while job growth continued at a moderate pace in July wage growth remained faster than expected, fueling worries that the Fed may keep rates higher for longer.

U.K. GDP

The U.K. is to release second quarter GDP data on Friday which is expected to tick fractionally higher, indicating that the overall economy remains all but stagnant. In May, it shrank less than expected, having almost stalled in the prior two months.

The Bank of England raised U.K. rates to a 15-year-high of 5.25% last Thursday, its 14th back-to-back increase, and warned that borrowing costs were likely to stay high for some time.

British inflation hit a 41-year high of 11.1% last October and has fallen more slowly than elsewhere, standing at 7.9% in June, the highest of any major economy.

Deputy Governor Ben Broadbent said keeping relatively high rates over an extended period was key for cutting inflation, even as the BoE sees the economy growing only minimally in the coming years.

China inflation

China is to release trade figures on Tuesday followed by July inflation data on Wednesday, which is expected to show a drop in consumer prices, amid concerns over the outlook for the world’s second largest economy.

China’s economy rebounded strongly in the first quarter after strict pandemic-era curbs were suddenly removed late last year, but the recovery has faltered in recent months as demand at home and abroad weakens.

Authorities have rolled out a series of policy measures in recent weeks to support the flagging recovery, though details have been scant, and investors are expecting more to come.

Eurozone data

In the Eurozone, Germany is to release data on industrial production on Monday. The report is expected to point to a decline amid a slowdown in global demand, particularly from China.

The German economy stagnated in the second quarter of 2023, missing forecasts for modest growth, as weak purchasing power, higher interest rates and low factory order books all weighed on the euro zone's largest economy.

--Reuters contributed to this report

By Ross Kerber

(Reuters) - S&P 500 chief executives made $16.7 million on average in 2022, 272 times the pay of their median workers, a new study showed on Thursday, a decline on both measures over the prior year as CEO compensation fell with poor stock returns.

The annual "Executive Paywatch" study released by the AFL-CIO, the top American labor union federation, has become a widely cited gauge of U.S. income inequality.

Average CEO pay fell from $18.3 million and 324 times median worker earnings in 2021 for companies in the same index. Poorer stock performance accounted for much of the decline in CEO pay in 2022 because their compensation is often tied partly to investor returns.

Meanwhile, real average hourly earnings for U.S. workers fell 1.6% for 2022, according to U.S. government figures.

"CEO pay fell more than worker pay but didn’t fall enough to make it fair or equal," said study author Brandon Rees, the labor federation's deputy director of corporations and capital markets. "This is an impossible level of compensation for an individual person to receive in just one year," he said.

AFL-CIO officials also noted the CEOs' average pay fell less than the 18% decline in the S&P 500's total return last year. CEO pay information in the study was drawn from corporate disclosures.

The pay ratio in this year's study was the lowest it has been since 2019 when it stood at 264. Driven by hefty stock awards, CEO compensation has trended upward. A decade ago, average S&P 500 CEO pay was $11.7 million, and companies were not required to report the ratio of CEO pay to that of their median worker.

The study also discussed the potential impact of artificial intelligence, which labor leaders worry will eliminate jobs.

By Lucia Mutikani

WASHINGTON (Reuters) - U.S. job growth likely slowed further in July, but retained enough momentum to shield the economy from a recession as hefty interest rate increases from the Federal Reserve cooled demand.

The Labor Department's closely watched employment report on Friday is still expected to show a tight labor market, with the unemployment rate steady near multi-decade lows, though wage growth probably moderated. It would follow on the heels of data last month showing consumer spending resilient and the increase in annual inflation slowing sharply in June.

Economists who have long been forecasting a downturn by the fourth quarter of this year are increasingly becoming convinced that the "soft-landing" scenario for the economy envisaged by the Fed is now possible.

"There are signs that labor demand is decelerating, but it's not like it's fallen off a cliff," said Sam Bullard, a senior economist at Wells Fargo (NYSE:WFC) in Charlotte, North Carolina.

"Certainly, if we get another payrolls number in the 200,000 region, that would add to evidence that the Fed can engineer a soft landing."

Nonfarm payrolls likely increased by 200,000 jobs last month, after rising 209,000 in June, according to a Reuters survey of 80 economists. That would be the smallest gain since December 2020. Still, employment growth would be double the roughly 100,000 jobs per month needed to keep up with the increase in the working age population.

Companies are hoarding workers after struggling to find labor during the COVID-19 pandemic. Employment in some areas like leisure and hospitality remains below pre-pandemic levels.

Local government education also experienced accelerated retirements, which is boosting the hiring of teachers and support personnel. Economists did not see an impact from a heat wave, which blanketed large swathes of the country in July.

"While the extreme heat may have delayed some construction projects and postponed certain leisure activities, history suggests that heat waves have little impact on hiring or work hours," said Carl Riccadonna, chief economist at BNP Paribas (OTC:BNPQY) in New York. "Rather, inclement weather disruptions tend to occur during the winter and around the hurricane season."

Striking Hollywood writers and actors also likely had no impact on employment growth. The Labor Department's Bureau of Labor Statistics, which compiles the employment report, made no mention of the work stoppage in its July strike report.

MIXED SIGNALS

July's payrolls could surprise in either direction. The ADP's national employment report on Wednesday, pointed to strong private hiring last month. First-time applications for state unemployment benefits were much lower in July relative to June.

U.S.-based employers announced the fewest layoffs in 11 months in July, according to global outplacement firm Challenger, Gray & Christmas. But the Institute for Supply Management's measures for the manufacturing and services industries employment softened, with companies citing slowing demand and worker shortages.

The Labor Department reported on Tuesday that there were 1.6 job openings for every unemployed person in June, little changed from May. The abundance of unfilled jobs, together with the Conference Board's consumer confidence survey in July showing households bullish on the labor market, poses a risk to the unemployment rate.

The jobless rate is forecast unchanged at 3.6% last month, staying within striking distance of levels last seen more than 50 years ago. It is well below the Fed's latest median estimate of 4.1% by the fourth quarter of this year.

With the labor market still tight, wages likely continued to rise though at a moderate pace. Average hourly earnings are forecast climbing 0.3% after increasing 0.4% in June.

That would lower the year-on-year increase in wages to 4.2% from 4.4% in June. Though annual wage growth remains too high to be consistent with the Fed's 2% inflation target, it would be the latest indication of wage pressures continuing to subside into the third quarter. Growth in wages and unit labor costs moderated in the second quarter.

The raft of inflation-friendly data has led many economists to believe that the Fed's fastest rate hiking cycle in more than 40 years was probably over. The U.S. central bank has raised its policy rate by 525 basis points since March, 2022.

"We are not there yet, but we are approaching a Goldilocks economy," said Sung Won Sohn, Finance and Economics professor at Loyola Marymount University in Los Angeles.

But some economists argued that the Fed was not done raising rates, citing its laser focus on inflation.

"The hawks at the Fed may become increasingly uncomfortable with the possibility of reemerging inflation if the labor market remains so tight," said Veronica Clark, an economist at Citigroup (NYSE:C) in New York. "We expect a few somewhat stronger inflation readings into the fall and a labor market that remains stronger than the Fed's latest forecasts will likely lead to Fed officials raising rates again in November."

By Ankur Banerjee

SINGAPORE (Reuters) - Asian shares rose on Friday, while the dollar pulled back from a one-month peak as investors took stock of the slew of U.S. economic data that showed a resilient labour market ahead of a crucial non-farm payrolls report due later in the day.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.46% higher after dropping 2.3% on Thursday. Japan's Nikkei was choppy and last up 0.1%.

"Asian equities face challenging trading conditions on Friday," said market analyst Anderson Alves at ActivTrades, pointing to a risk-off environment after Fitch downgraded its rating of U.S. government by one notch earlier in the week.

"This change has added extra turbulence for Asian risk assets," Alves said.

Chinese blue-chips opened up 0.7%, while the Shanghai Composite Index was up 0.5%. The Hong Kong benchmark Hang Seng surged 1.3% at open.

China's central bank governor pledged on Thursday to guide more financial resources toward the private economy, indicating refreshed urgency from authorities to bolster business sentiment as economic momentum weakens.

Overnight, U.S. stocks closed little changed after a choppy trading session, as investors weighed rising Treasury yields with the latest batch of economic data and earnings. [.N]

Data showed the number of Americans filing new claims for unemployment benefit rose slightly last week, while layoffs dropped to an 11-month low in July as labour market conditions remain tight.

"U.S. stock markets may be entering a correction phase after a multi-month rally," said markets analyst Tina Teng at CMC Markets. Teng said the upcoming non-farm payroll data will likely provide clues to the Federal Reserve's policy path and can be another price mover.

A mixed set of earnings from technology bellwethers are likely to dominate U.S. markets with Amazon.com (NASDAQ:AMZN) reporting sales growth and profit that beat analyst estimates, whereas Apple (NASDAQ:AAPL) forecast a sales slump to continue into the current quarter. E-mini futures for the S&P 500 was up 0.29%.

U.S. Treasury yields have been elevated partly due to a rise in supply, with the Treasury Department announcing a $103 billion offering on Wednesday. [US/]

The yield on 10-year Treasury notes was at 4.187% in Asian hours, just shy of the nine-month peak of 4.198% touched on Thursday. The yield on the 30-year bond was at 4.302%, close to the nine-month high of 4.326%.

In currencies, the dollar index, which measures U.S. currency against six peers, fell 0.039% to 102.41, easing away from the near one-month peak of 102.84 reached on Thursday.

The euro was up 0.08% to $1.0953, while the yen weakened 0.04% to 142.63 per dollar, after gaining 0.5% on Thursday as investors sought safer assets.

Sterling last fetched $1.2725, up 0.09%, after a choppy session overnight as a 25 basis point interest rate hike from the Bank of England provided little comfort for the pound.

In commodities, U.S. crude rose 0.55% to $82.00 per barrel and Brent was at $85.56, up 0.49% on the day. [O/R]

Spot gold added 0.1% to $1,936.09 an ounce. U.S. gold futures gained 0.10% to $1,933.90 an ounce. [GOL/]

MANILA (Reuters) - Philippine annual inflation eased for a sixth straight month in July, the statistics agency said on Friday, reflecting slower increases in food and utility costs.

The consumer price index rose 4.7% in July, its slowest annual increase since March 2022, but the inflation rate remained above the central bank's 2% to 4% target for the year.

Headline inflation for January to July averaged 6.8%.

Economists in a Reuters poll had forecast the consumer price index would rise by 5.0% for July, above the central bank's projection for a 4.1% to 4.9% rise for the month.

Core inflation, which strips out volatile food and fuel items, slowed to 6.7% in July, falling from 7.4% in the previous month.

By David Milliken, Andy Bruce and Suban Abdulla

LONDON (Reuters) - The Bank of England raised its key interest rate by a quarter of a percentage point to a 15-year peak of 5.25% on Thursday, its 14th back-to-back increase, and warned that borrowing costs were likely to stay high for some time.

While the U.S. Federal Reserve and the European Central Bank signalled that their rate hikes were nearing an end when they both raised borrowing costs by a quarter-point last week, the BoE's Monetary Policy Committee (MPC) gave no such suggestion it was about to pause as it continues to battle high inflation.

"The MPC will ensure that Bank Rate is sufficiently restrictive for sufficiently long to return inflation to the 2% target," the BoE said in fresh guidance.

Governor Andrew Bailey stressed that message, even as the BoE saw the economy growing only minimally in the coming years.

"I don't think it is time to declare it's all over," he told a press conference, adding it was "far too soon" to speculate about the timing of any rate cuts. Bailey also said "we might need to raise interest rates again but that's not certain".

British inflation hit a 41-year high of 11.1% last October and has fallen more slowly than elsewhere, standing at 7.9% in June, the highest of any major economy.

Deputy Governor Ben Broadbent said keeping relatively high rates over an extended period was key for cutting inflation.

Despite the BoE's message, financial markets - which had seen a more than one in three chance of a half-point rate rise to 5.5% - focused on how the BoE had for the first time described its policy stance as "restrictive".

Investors moved to price in slightly less BoE tightening, with rates seen peaking at 5.75% and two-year bond yields down, although investors still saw a two-in-three chance that rates would rise to 5.5% next month. Sterling was little changed on the day.

Analysts at NatWest cut their forecast for peak Bank Rate to 5.5% from a previous estimate of 6%.

"The Bank of England today acknowledged for the first time in the current tightening cycle that its monetary policy is tight," Kallum Pickering, senior economist at Berenberg, said.

"Although policymakers kept open the prospect of further hikes ... this supports our call that the BoE is close to peak rates."

The BoE has been criticised for sounding too relaxed about inflation in the past. Now the BoE is alarmed that inflation's rise is becoming a long-term problem for the economy.

Bailey said the pace of pay growth was "materially above" the BoE's previous forecasts.

Wage rises had been a bigger driver of high inflation than companies' profit margins, the BoE said.

THREE-WAY SPLIT

Policymakers voted 6-3 for the increase, but were split three ways on the decision for the first time this year. Two MPC members - Catherine Mann and Jonathan Haskel - voted for a bigger, half-point increase, while Swati Dhingra again voted for no change, warning of the risk of smothering the economy.

New MPC member Megan Greene voted in line with the majority after she replaced Silvana Tenreyro, one of the MPC's doves.

The BoE forecast inflation would fall to 4.9% by the end of this year - a faster decline than it had predicted in May.

This will be a relief for Prime Minister Rishi Sunak, who pledged in January to halve inflation this year, a goal which had looked challenging.

"If we stick to the plan, the Bank forecasts inflation will be below 3% in a year's time without the economy falling into a recession," finance minister Jeremy Hunt said after the BoE's announcement.

Not everyone backs the BoE's approach. A small number of protesters from campaign group Positive Money gathered outside the central bank on Thursday.

"What we need are better tools for dealing with inflation than blunt instruments like interest rates, and a windfall tax on bank profits to redress the harm done to workers and families by rate hikes," Positive Money campaigner Hannah Dewhirst said.

Mortgage costs have hit their highest since 2008, weighing on house-building. The BoE forecast housing investment would fall 5.75% this year and 6.25% in 2024.

The jobless rate is predicted to rise by more than before, reaching 4.8% in late 2025 from 4.0% now.

Overall, the BoE noted the economy's recent "surprising resilience" but barely changed its growth forecasts from three months ago, with the economy due to expand a meagre 0.5% in 2023 and 2024, and just 0.25% in 2025.

Inflation is not expected to return to its 2% target until the second quarter of 2025, three months later than May's forecast. Services price inflation - which the BoE said offered a longer-term price signal - was projected to stay high.

Wage growth at the end of this year was expected to be 6%, up from May's forecast of 5%, as pay demands had not fallen in line with lower prospects for inflation.

"Some of the risks of more persistent inflationary pressures may have begun to crystallise," the BoE said.

BERLIN (Reuters) - German exports stagnated in June, with a smaller than expected rise of 0.1% over the previous month, data from the federal statistics office showed on Thursday.

A Reuters poll had predicted a month-on-month increase of 0.3%.

"Trade is no longer the strong resilient growth driver of the German economy that it used to be, but rather a drag," said Carsten Brzeski, global head of macroeconomics at ING.

Supply chain frictions, a more fragmented global economy and China increasingly being able to produce goods it previously bought from Germany were all factors weighing on exports in June, Brzeki added.

Imports fell 3.4% on the month, the statistics office data showed.

The foreign trade balance showed a surplus of 18.7 billion euros ($20.45 billion) in June, up from a slightly revised 14.6 billion euros the previous month.

Exports to European Union countries were up 1.3% on the month, while exports to the United States fell by 0.2% and exports to China and Russia were 5.9% and 2.3% lower, respectively, the office said.

"Since the end of the pandemic, global export volumes have been treading water," said Thomas Gitzel, chief economist at VP Bank Group, adding that the steep drop in exports to China in particular should be seen as a warning sign for the global economy.

Sentiment in the German export industry deteriorated slightly in July, a survey by the Ifo Institute showed last week.

"Demand from abroad is developing rather weakly," said Klaus Wohlrabe, head of surveys at Ifo. "This is also the result of restrictive monetary policy in the U.S. and Europe, the effects of which are gradually being felt."

The statistics office publishes more detailed economic data on its website.

($1 = 0.9146 euros)

BEIJING (Reuters) - China's cyberspace regulator issued on Thursday draft rules requiring service providers that hold data on more than 1 million people to undergo at least one compliance audit a year, another step in efforts to control data and information.

Infrastructure information providers or services that process data of more than one million users must undergo a security review conducted by an agency appointed by the regulator if they are supplying data overseas, the Cyberspace Administration of China (CAC) said in its draft.

The appointed compliance agency must also evaluate services that own the data of more than 100,000 users, or those with sensitive data of more than 10,000 users, the CAC said.

Services that hold data of fewer than 1 million users must undergo a personal information compliance check at least once every two years, the CAC said.

China has in recent years tightened controls on data and information, especially data and information that flows abroad.

Legislators in April passed a wide-ranging update to anti-espionage legislation, banning the transfer of information related to national security and broadening the definition of spying.

The CAC last year required platform companies with data on more than 1 million users to undergo a security review before listing their shares overseas.

By Svea Herbst-Bayliss

NEW YORK (Reuters) - Billionaire investor William Ackman on Wednesday said his hedge fund Pershing Square Capital Management has placed a bet against U.S. 30-year Treasuries, calling it both a hedge on the impact of higher long-term rates on stocks and a good standalone bet.

"We are short in size the 30-year T," Ackman wrote on messaging platform X, formerly known as Twitter. He argued that if long-term inflation is 3% not 2%, the 30-year Treasury yield could rise to 5.5%, adding "and it can happen soon." On Wednesday, the yield on the 30-year Treasurys climbed to 4.16%, the highest close of the year.

"We implement these hedges by purchasing options rather than shorting bonds outright," Ackman wrote.

Ackman said higher defense costs, energy transition and the greater bargaining power of workers all point toward higher inflation. The Federal Reserve has raised interest rates aggressively to curb inflation and signaled last month that it is keeping its options open after having raised rates by a quarter point to their highest level since 2001.

Ackman, once one of Wall Street's most voluble investors who cemented his reputation as an activist investor by pushing for changes at companies ranging from Chipotle Mexican Grill (NYSE:CMG) to railroad Canadian Pacific (NYSE:CP), has recently used the social media platform to opine on economic policy and presidential politics.

On Wednesday, he wrote: "There are few macro investments that still offer reasonably probable asymmetric payoffs and this is one of them."

In 2020 Ackman was among a small number of investors to call the COVID-19 crisis early and put on a hedge that earned his fund proceeds of $2.6 billion early in the year.

"The best hedges are the ones you would invest in anyway even if you didn't need the hedge," Ackman wrote. "This fits that bill, and also I think we need the hedge."

He remarks on X were made after rating agency Fitch on Tuesday downgraded the U.S. government's top credit rating, a move that drew an angry response from the White House and surprised investors, coming despite the resolution of the debt ceiling crisis two months ago. Ackman didn't address the Fitch move in his posting.

A spokesman for Ackman didn't respond to a Reuters request for additional comment.

Traders' immediate response to the Fitch downgrade was to embark on a safe-haven push out of stocks and into government bonds and the dollar.