What’s New in the US Economy
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Wall Street stocks continued to rise while government bonds softened as investors addressed the effects of US employment reports, which were much weaker than expected for the world’s largest economy.
U.S. employer Added 235,000 jobs In August, the government’s monthly non-farm payrolls survey showed about one-third of economists’ forecasts for more than 728,000 new hires. Wages rose more than expected, but participation remained unchanged at 61.7%.
Wall Street’s leading S & P 500 Index rose 0.1% by mid-afternoon in New York, while the technology-focused Nasdaq Composite rose 0.2%. Both indices were high. Meanwhile, the STOXX 600 stock index in Europe fell 0.6%.
Yields on 10-year Treasuries, which are inversely proportional to price, rose 0.04 points to 1.32 percent. The dollar index, which measures the US currency, fell 0.3 percent against the other six.
Investors were steeled for employment reporting to provide catalysts for market revisions or extended rallies after Federal Reserve Chairman Jay Powell signal The central bank said this year it would cut $ 120 billion in monthly bond purchases, emphasizing the need for further development of the pandemic-damaged labor market.
Kasper Elmgreen, Head of Equity for Amundi, Fund Manager, said: “As the Fed has a strong focus on employment, these next months’ employment reports will be very important.”
Powell admitted at the Jackson Hall Central Bank symposium last month after U.S. consumer prices rose 5.4% in the 12 months to July. call From reducing stimulus spending from some Fed officials to avoid further inflationary pressures and financial market bubbles.But the Fed’s chief also warning Of the danger of acting too fast.
Guillaume Paillat, multi-asset portfolio manager at Aviva Investors, said the decline in employment “supports the Fed’s cautious approach.” “Now I can sit down and wait for more data,” the central bank said.
Schroders Chief Investment Officer Johanna Kyrklund said the payroll report was “disruptive”, citing results that eased concerns about economic slowdown and inflation, “in the number of Goldilocks that many expected. No, “he explained.
“At the same time there are several pockets of the economy facing labor shortages. [economic] Growth momentum has peaked, “says Kyrklund. She added that employment data was added to the “slightly stagnant trend” after US gross domestic product growth also fell short of economists’ expectations in the second quarter of this year.
Prior to the announcement of payrolls, investors focused on whether the Fed would announce the start of tapering in any of its monetary policies. meeting Some have argued that in the month following this month or November, the numbers may indicate a slower tapering date than expected.
Cima Shah, Chief Strategist of Principal Global Investors, said: “The rate hike should take place in late 2023, but I don’t think the Fed is rushing to normalize the policy rate.”
The euro was stable against the dollar and bought $ 1.189. Sterling rose 0.4% to $ 1.139. Brent crude, the oil benchmark, fell 0.6% to $ 72.63 a barrel.
Markets steady as US jobs report comes in under forecast Source link Markets steady as US jobs report comes in under forecast