Gas crisis forces two UK fertiliser plants to halt work; US retail sales beat forecasts – business live

And finally, European stock markets have ended the day higher.

In the City, the London stock market finished 11 points higher at 7027 points.

Construction rental group Ashtead led the rises, up 5.2% after saying earnings would be ahead of forecasts in a strong earnings update.

Travel stocks held their gains, with IAG up 3.9% higher.

But mining companies still lagged, with Anglo American down 4.5% and Rio Tinto down 4%.

The wider Stoxx 600 gained 0.44%, with gains in France, Germany, Italy and Spain.

On that note, goodnight! GW

Here’s Danni Hewson, AJ Bell financial analyst, on today’s action in the markets:

“The UK’s traffic light system has come in for considerable criticism from both industry bosses and consumers so it’s little wonder the speculation that its about to be scrapped has chimed with investors. IAG, Easy Jet and Wizz Air have all been among the top performers on London markets today. October half term is the next big opportunity for the travel sector and any changes that can make travelling less unsettling and testing less expensive will yield dividends. There are a great many question marks about how far the government will go, particularly when it comes to changing testing requirements but even simplification of the basic go, no go areas will go a long way towards shoring up confidence, particularly amongst families.

“Shortages have had different implications for two big names of the FTSE 250 today, with The Drax Group making gains as energy prices soar and Marks and Spencer dropping back following the news that difficulties in getting products onto shelves in France have forced them to close 11 of their stores. Supply chain complexities are weighing heavily on many UK businesses right now and there are not many company trading updates that don’t include at least a line nodding to further issues on the horizon.

US retail sales surprised on the upside, but the surprise doesn’t seem to have gone down well with Wall Street as a whole although the jump in consumer spend has benefited the likes of American Express and Visa today and retail behemoths Home Depot, Walgreens and Walmart have all made gains. Investors seem to be trying to fathom whether the unexpected jump was a result of an economy running on a full tank or if one off factors, like traditional back to school activity has skewed the curve. Prices and availability will be the watchwords for September as the shortages being highlighted by many British companies in the last few weeks begin to filter through into the data. Tomorrow’s UK retail sales will be given careful consideration to see how UK consumers are adapting to these inflationary times.”

More on the fertiliser crunch:

Michael Pearce of Capital Economics is not too impressed by the rise in US retail sales:

Even though the 0.7% rise in headline retail sales in August was much better than expected, the details were far less positive, with big downward revisions to previous months, while the rise in online and grocery store spending, which contrasts with stagnant spending at bars and restaurants, suggesting that Delta fears are playing a key role.

Here are today’s stories so far:

Wall Street has made a mixed start to trading, as traders digest the unexpected jump in US retail sales in August… and the rise in jobless claims last week.

The Dow Jones industrial average gained 29 points, or 0.08%, at the open to 34,843 points.

But the tech-focused Nasdaq dipped by 0.3%, with the broad S&P 500 index slipping by 0.15%.

More reaction to the bounce in US retail sales:

US retail sales unexpectedly rose in August as a pickup in purchases across many categories more than made up for weaker demand for cars.

US retail sales jumped by 0.7% in August, the Commerce Department reports, much stronger than the 0.8% fall expected — as retailers kept shifting stock despite the global supply chain problems.

That follows a downwardly revised 1.8% decline in July, and suggests that demand was more resilient than expected last month (despite the slowdown in hiring in August).

If you exclude motor vehicle and parts, and gasoline sales, then underlying retail sales were 2.0% stronger in August.

Furniture and home furnishing sales jumped 3.7% in the month, while food and beverage spending was up 1.8%, and general merchandise rose 3.5%.

On an annual basis, total retail and food sales were 15% stronger than in August 2020, when the US was emerging from the first wave of Covid-19.

Over the last year, clothing and clothing accessories stores were up 38.8% compared with August 2020, while gasoline stations were up 35.7%.

Marwan Forzley, CEO of payments platform Veem, says:

Retail sales saw a 0.7% increase in August as consumers prepared for an in-person back to school season.

Spurred by a surge in back to school shopping, consumer confidence soared as businesses reopen and normalcy returns, indicating the continuation of an economic recovery. The Delta variant has proved to have little effect on consumers who have continued to dine at restaurants and bars, and are expected to continue this behavior into the Fall.

The approaching holidays also give consumers even more of a reason to spend, giving way to an expected increase next month.

The number of Americans filing new claims for unemployment support has risen by 20,000.

There were 332,000 new ‘initial claims’ for jobless support in the week to September 11th, up from 312,000 in the previous seven days, on a seasonally adjusted basis.

But… the four-week moving average was the lowest since March 2020, when the pandemic hit the US economy, at 335,750.

If you strip out seasonal adjustments, the number of initial claims actually fell by over 23,000 to 262,619.

Another 28,456 self-employed and gig economy workers filed claims through the Pandemic Unemployment Assistance programme – a sharp fall. That programme officially wrapped up this month, but people who didn’t claim before can still apply.

The European gas price surge isn’t CF Industries’ only problem.

Earlier this month, the company had to declare a force majeure (meaning it couldn’t fulfill orders) at the world’s largest nitrogen facility, in Donaldsonville, Louisiana.

It briefly suspended production at the nitrogen complex because of the approach of Hurricane Ida – a move that sent fertilizer prices soaring.

Bloomberg explained last week:

CF Industries Holdings Inc. said on Sept. 3 that it can’t fill orders from its Donaldsonville, Louisiana, nitrogen complex, which was closed ahead of Hurricane Ida, according to a letter seen by Bloomberg. That’s stoking fears of production losses at a time when supplies are already tight.

Fertilizer prices are already high, and that’s adding to increasing costs for farmers, who are paying more for everything from land and seeds to equipment. The higher costs of production may mean more food inflation is on the way. Global fertilizer costs touched near-decade highs in recent weeks, becoming expensive enough where growers may have to curb purchases.

CF began restarting production at Donaldsonville a week ago, starting with its ammonia plants.

A shortfall of fertiliser could mean crop yields are weaker — leading to less produce in the shops.

That would be another blow to struggling supply chains, and could push prices higher.

UK companies have suffered a sharp rise in recruitment problems, with a lack of EU applicants following Brexit partly to blame.

The Office for National Statistics reports that 41% of companies with at least 10 staff said they were struggling to fill vacancies in the two weeks to 5th September, up from 32% in early August.

Across all firms (including the smallest), 13% reported recruitment difficulties late last month, up from 9% in early August.

Hospitality businesses are struggling the most with unfilled roles. Some 30% said that vacancies were more difficult to fill than normal.

Tuesday’s jobs report showed that the number of vacancies in the UK hit a record high in August, with over 1m positions unfilled.

The ONS says that “a lack of EU applicants” is contributing to recruitment challenges, particularly in transport and storage — where the shortage of lorry drivers is hurting UK supply chains.

Businesses reported that “a lack of suitable applicants” was the main reason for being unable to fill vacancies in late August 2021.

A quarter said a reduced number of EU applicants was a factor — which rose to 46% among transport and storage businesses.

Nearly half of transport and storage companies also blamed “other reasons”, the ONS explains:

The survey question allows multiple responses, so it could be that some businesses are experiencing recruitment challenges because of a lack of EU applicants as well as “other reasons” (which could include border controls, retirements or difficulty in getting an HGV licence at short notice).

Some EU workers have left the labour market during the coronavirus (COVID-19) pandemic. The number of EU nationals employed in the UK fell by 8.7% between January to March 2020 and April to June 2021. Meanwhile, the total number of people in employment fell by 2.4% over the same period.

Industries experiencing recruitment challenges because of reduced EU applicants have also been affected by a fall in EU workers, according to the Business Insights and Conditions Survey (BICS).

In early August, transport and storage and hospitality businesses were the most likely to say they had fewer EU workers than in previous years (7%).