5 June 2017

Bassanese Bites: Goldilocks Economy – Week beginning: 5 June 2017

US stocks pushed further into record territory last week as the weaker-than-expected May payrolls report (employment +138k vs. market +185k) portrayed an economy that is neither too hot nor too cold- as Goldilocks might say, it’s  just right.  Importantly, although the unemployment rate edged lower to 4.3%, average hourly earnings remained benign, rising just 0.2% with annual wage growth steady at 2.5%.  The tight labour market is likely enough to see the Fed still tighten this month (market probability now around 90%), and at least once more later this year – but with inflation still low, market fears of more aggressive Fed tightening are dissipating, as reflected in further declines in long-term bond yields and the $US.

 

Click to read the Full Report

< Back to Blog