Is the US economy slowing down? Here’s what the latest data suggests
Non-Farm Payrolls
painted a mixed pictures today with only 169K jobs created against expectations
of 190K, but the month prior enjoyed an upward revision to 242K from
207K originally reported. Additionally the unemployment rate declined to 4.9%
from 5%, the lowest level in 4 years. The details of the report were decidedly
weaker however as manufacturing lost another 14K jobs and average monthly
earnings increased only by 0.1%.
Overall, as we suspected the slowdown in the US
economy the first evidence of which was the less that expected Retail Sales
several weeks ago followed by the much weaker Durable Goods number last week and
finally shockingly low Chicago PMI report this Wednesday is expressing itself in
the employment data. Pressed by higher input costs from the raging energy sector
and lacking any additional demand from the US consumer whose savings rate went
negative for the first time since 1933, US businesses are unlikely to ramp up
hiring in the near future. As we pointed out in our morning comment, "The market
now believes the game has changed and US interest rate hikes which have been the
key driving force behind dollar’s rise are no longer a certainty. …The market
will be already looking to the slowdown in September data and any profit taking
drop in the EUR/USD will most likely be a retrace.â€
Click here for Boris’ article earlier today on the EUR/USD.
Boris
Boris Schlossberg serves as Senior Currency
Strategist with Forex Capital Markets in New York, the largest retail forex
market maker in the world. He is a monthly contributor to SFO Magazine with
articles focused on understanding proper risk management, trader psychology and
true market structure. He is also a featured expert at
www.fxstreet.com and a frequent
commentator for the Marketwatch From Dow Jones Currency and Bond Report
sections.