|Data for week commencing 03 June 2019|
The stock market ‘gift’ that keeps on giving (i.e. interest rate cuts) showed off its prowess overnight on Wall Street, with a lousy jobs report, where 75,000 jobs were created in May when economists had tipped 180,000. Sure, this might underline the lack of forecasting skill in US economists but it was the second time in four months that a sub-100,000 job creation number turned up.
The suggestion that these labour market numbers are telling us that the trade war effect on the US economy is slowing down economic growth and loosening the job market makes traders start thinking about an imminent interest rate cut. Of course, an economist like Fed boss Jerome Powell will at least wait one or two months to see if a significant downward trend is in place and how the trade war talks progress before opting for a rate cut.