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4 Jul 2014
US labour market remains solid – Danske Bank
FXStreet (Edinburgh) - Morten Helt, Senior Analyst at Danske Bank, remarks the very good performance of June’s Payrolls in the US economy.
Key Quotes
“The US job report for June released yesterday was stronger than expected, showing job gains of 288 in June (consensus 217K, DBM 225k ) and the unemployment rate declined to 6.1% in June from 6.3% in May (consensus 6.3%, DBM 6.3%)”.
“However, wage inflation eased to 2.0% y/y from 2.1% y/y in May and as long as wage growth remains subdued the Fed will probably not be too concerned about the fast decline in the unemployment rate”.
“We look for job growth to rise gradually to 250k-300k in H2 as growth picks up further steam”.
“As core inflation is also bottoming out and housing is expected to recover, this will likely lead to less dovish talk from the Fed during the autumn and more risk premium in the US money market curve”.
“US equities, interest rates and the US dollar increased yesterday following the strong job growth, which suggests that the consensus 3.5% q/q (annualised) GDP forecast for Q2 is still achievable and some upside risk to the 3.1% q/q consensus forecast for GDP growth in Q3”.
Key Quotes
“The US job report for June released yesterday was stronger than expected, showing job gains of 288 in June (consensus 217K, DBM 225k ) and the unemployment rate declined to 6.1% in June from 6.3% in May (consensus 6.3%, DBM 6.3%)”.
“However, wage inflation eased to 2.0% y/y from 2.1% y/y in May and as long as wage growth remains subdued the Fed will probably not be too concerned about the fast decline in the unemployment rate”.
“We look for job growth to rise gradually to 250k-300k in H2 as growth picks up further steam”.
“As core inflation is also bottoming out and housing is expected to recover, this will likely lead to less dovish talk from the Fed during the autumn and more risk premium in the US money market curve”.
“US equities, interest rates and the US dollar increased yesterday following the strong job growth, which suggests that the consensus 3.5% q/q (annualised) GDP forecast for Q2 is still achievable and some upside risk to the 3.1% q/q consensus forecast for GDP growth in Q3”.