- US: Disappointing job
- Eurozone: A new kind of divide
- US: Another string of bad news
Survey and activity data have been suffering from a mix of bad weather, strikes and an expensive dollar. But the labour market held up, so optimism remained that the economy would soon rebound after a slowdown in Q1. The March labour market report brought unwelcome news: job gains slowed to 126k, the most disappointing figure since summer 2012, while we were looking forward to a thirteenth month of payroll gains above 200k. In addition, data for the previous two months were revised downwards.
A slowdown was expected in the manufacturing sector: employment went down for the first time since July 2013. However, the service-producing sector, more immune to the fluctuations of the dollar, also markedly slowed down. Still, it is always a bad idea to change ones expectations for just one piece of data. The strength in job creations experienced in the recent past could definitely not be sustained in the long run. Keeping in mind that the US economy still suffers from slack helps smoothing data from one month to the other.
The unemployment rate may be down to 5.5% from a 10% peak in October 2009, but a broader definition, including people marginally attached to the labour market as well as those working part-time because they are unable to a find fulltime position, remains way higher than in “normal recovery” times. This partly explains why wages have remained sluggish. Hourly earnings of nonsupervisory production workers rebounded somewhat in March, up 1.8% y/y, but still run slower than last year, when they gained 2.3%.
Recommended Content
Editors’ Picks
EUR/USD stays below 1.0700 as USD gathers strength
EUR/USD continues to trade in negative territory below 1.0700 on Wednesday. Higher-than-expected increase in US JOLTS Job Openings for April provides a boost to the US Dollar and weighs on the pair as investors keep a close eye on US debt-limit news.
GBP/USD struggles to recover above 1.2400
GBP/USD has lost its traction and declined below 1.2400 after having climbed above that level earlier in the day. The pair struggles to gather recovery momentum as the US Dollar holds its ground after strong employment data. Markets await House vote on debt-limit bill.
Gold extends daily rebound beyond $1,970
Gold price has gained traction and advanced above $1,970 in the second half of the day on Wednesday. The benchmark 10-year US Treasury bond yield stays in negative territory and allows XAU/USD to keep its footing. Market mood remains cautious ahead of the debt-ceiling vote.
Ethereum holders pull $1 billion in ETH off exchanges hinting retail-led rally
Ethereum holdings in exchange wallets declined by $1.04 billion between May 8 and May 31. Interestingly, while large wallet investors have shed their Ether holdings, the altcoin got redistributed to addresses with less than 1 ETH.
C3.ai Stock News: After 33% rally, AI shares backtrack ahead of earnings
C3.ai (AI) stock slipped 7.6% to $41.62 in Wednesday’s premarket ahead of quarterly earnings expected after the close. This may just be traders taking profits after Tuesday’s 33.4% surge in the AI stock price.