US jobs report to show fears are overhyped?
It’s been an action-packed week in the markets, particularly over the last couple of days and fortunately, that’s not letting up today.
The US jobs report is arguably the most important and widely followed economic report each month and this month is no different. It’s been a weird year so far when it comes to the jobs report, with the government shutdown likely being responsible for playing havoc with the data. That appeared to have settled down last month, with job creation being more in line with the norm and unemployment and wage growth being back on track.
We’re expecting another strong report this month – unemployment 3.8%, 180,000 new jobs and 3.4% earnings increase – which begs the question, is the economy really as vulnerable as so many seem to fear? The Fed may have come around to the idea that the risks are mounting and the inverted yield curve may well have given it the creeps but they’re not yet bowing to the idea that rate cuts are warranted.
In going against the market, the Fed provided a big lift to the dollar this week just as it was experiencing something of a correction. Now we’re back near the highs and it’s become a question of whether today’s report will spur it on further or just convince traders that the Fed is wrong and will eventually come around to the markets way of thinking.
