So folks, I'm looking from the roads now that we'll probably end Friday in the green after all. 🍀 Which is good after yesterday, but how do you feel about these two days of unemployment results in the US? 😊
The market is up, but I'd say the numbers weren't entirely satisfactory. The US economy created 209,000 new jobs in June, missing Wall Street's expectations for the first time in 15 months. Further, the report showed that the unemployment rate was at 3.6% in June, down from 3.7% the month before. Average hourly earnings rose 0.4% from the previous month and rose 4.4% from a year earlier, above consensus estimates of a 4.2% increase.
Oxford Economics' US economist Nancy Vanden Houten described earnings growth as "still too hot for Fed officials". Vanden Houten and other economists have suggested that average hourly earnings growth needs to grow at a rate closer to 3.5% for the Fed to reach its 2% inflation target.
As Mark Ondrej added in a report yesterday, employment data for June showed that private employers added 497,000 jobs, well above the Bloomberg consensus estimate of 225,000.
A team of economists at Citibank wrote, "The still-tight labor market maintained a 25 basis point gain this month, in our view, to a fait accompli." Following Thursday's strong economic news, futures tied to the Federal Reserve's benchmark interest rate implied a 95% chance the Fed will raise rates at its July meeting, according to the FedWatch CME tool. That didn't change today after the jobs report.
So, anyway, the market is reacting positively again today, which is good news for us, but it just reinforces to me that there's really nothing stopping the Fed from raising rates again and cooling that positivity in the market a bit. Have a good weekend. 😊
I think the Fed will lift :)
For me, these results are already "priced in" and some tenths won't move the market much... at most by tenths again... I think the trend is more interesting
It certainly put one in a good mood for the weekend. Unfortunately, I think a cooling of the market will come in the coming months. By now it will be earnings season, that's the stuff to watch..., so thanks for that overview.
I agree, and I see it the same way. While it is good that the market is reacting positively today, it is quite possible that the Fed will raise interest rates again.
Have a good weekend as well.😁
My investment recommendation: the higher the unemployment rate the better time to invest. Why? Because you are buying at better prices and the market is rising over the long term.