Daily Financial Market Outlook 06.04.2010
Posted by adminToday’s main data release is the US non-farm payrolls report for May. Encouragingly, the Federal Reserve has sounded significantly more upbeat about US labour market prospects in its recent communications on policy. The minutes of the 27-28 April FOMC meeting, for example, noted that ‘…employment had increased in recent months’ and numerous members ‘expected a further firming of labour markets conditions going forward’. We also note that the Fed did not have access to news of April’s 290k gain in employment at this particular FOMC meeting. Nonetheless, the bigger picture is still quite fragile, with no room for complacency. The unemployment rate is still high in an historical context, while the issue of long-term unemployment and an associated erosion of skills poses a clear threat to durable economic recovery. We look for non-farm payrolls to rise by 500k in May, after a 290k rise in April. However, private payrolls are forecast to moderate to 175k (down from 231k), with the majority of new hires expected to be for the upcoming US census. Consequently, we expect payrolls to slow sharply in the coming months.
Elsewhere, Canada will also report latest employment data for May while in the euro-zone, the second estimate of Q1 GDP is scheduled for release. We look for an unrevised +0.2% quarter-on-quarter outturn.
Chart: The US labour market is improving, although the jobless rate remains high by historical standards…
About the Author
Disclaimer: Any documentation, reports, correspondence or other material or information in whatever form be it electronic, textual or otherwise is based on sources believed to be reliable, however neither the Bank nor its directors, officers or employees warrant accuracy, completeness or otherwise, or accept responsibility for any error, omission or other inaccuracy, or for any consequences arising from any reliance upon such information. The facts and data contained are not, and should under no circumstances be treated as an offer or solicitation to offer, to buy or sell any product, nor are they intended to be a substitute for commercial judgement or professional or legal advice, and you should not act in reliance upon any of the facts and data contained, without first obtaining professional advice relevant to your circumstances. Expressions of opinion may be subject to change without notice. Although warrants and/or derivative instruments can be utilised for the management of investment risk, some of these products are unsuitable for many investors. The facts and data contained are therefore not intended for the use of private customers (as defined by the FSA Handbook) of Lloyds TSB Bank plc. Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority and is a signatory to the Banking Codes, and represents only the Scottish Widows and Lloyds TSB Marketing Group for life assurance, pension and investment business.
Such a well written post.. Thnkx for sharing this post!