Assured Trading: Markets tread water awaiting a jobs reports that could confirm direction of US economy.
Assured Trading: Markets are taking a break from concerns about the impact of the Brexit vote to focus on the June nonfarm payrolls data from the US Bureau of Labor Statistics. Already delayed by a week because of the July 4 Independence Day holiday, the report is being eyed for any clues it might provide to the trajectory of the US economy.
May’s nonfarm payroll data was an abject disaster with just 38,000 jobs being created and significant downward revisions made to the April and March reports served to add to the disappointment.
Consensus forecasts are for a rebound in job creation to 175,000 but Assured Trading is skeptical. “We think we’ve seen the turning point in the jobs recovery. The last two jobs reports have both missed estimates and we don’t see where the extra impetus for a rebound will have come from,” said Kit Morton, chief economist at Assured Trading.
Investors are looking for clues on when the US Federal Reserve will hike interest rates again in 2016 and the nonfarm payrolls is the most emotive of data the central bank depends on when setting policy. The dramatic turnaround in the job creation narrative was cited as one of the reasons for the Fed not raising interest rates at its last meeting on June 14-15, ahead of the Brexit vote in the UK.
“Assured Trading prefers not to indulge in guesswork but we think there’s a high likelihood that the number will fall well short of expectations,” said Morton.
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