How is the US faring right now vis-à-vis markets, jobs and the overall economy? Unfortunately the anticipated increase in private payrolls by Dow Jones was not met (173,000 being the expectation; 129,000 the result). According to Moody’s Analytics Chief Economist Mark Zandi:
“The job market is weakening, with employment gains slowing significantly across most industries and company sizes. Businesses are hiring cautiously as the economy is struggling with fading fiscal stimulus, the trade uncertainty, and the lagged impact of Fed tightening. If employment growth weakens much further, unemployment will begin to rise.”
The only gain that did transpire was through services, which encountered an increase of 135,000. Looking at education and health services was encouraging as there was a hike of 56,000 and professional/business services jumped by 41,000. Other increases occurred with: hospitality, IT, leisure, trade, transportation and utilities.
The Fed is claiming its lengthened low interest rate policy can be linked to higher salaries, full employment and stronger bargaining power. It also seems that those most affected positively were the more underserved groups including women and blacks.
Earlier this year, Barclays Chief US Economist Michael Gapen explained:
“The labor market is as strong as it’s been since pre-crisis times. The basic fundamentals of the economy are still solid. Therefore markets should expect the Fed’s policy rate to still go higher. How many more times, and when, is debatable, but this is not a report that tells the Fed they should just be on pause forever.”