No, the US economy is not in or on the brink of recession. Those who still had doubts certainly haven’t since today and the release of the Bureau of Labor Statistics’ July jobs report, which shows the world’s largest economy added more than 500,000 jobs last month “The unexpected acceleration in wage growth in July, combined with the further decline in the unemployment rate and the resurgence in wage pressures, makes ridiculous claims that the economy is on the brink of recession.”comments economist Michael Pearce of Capital Economics.
528,000 nonfarm payrolls were created in the United States, twice as many as economists had expected. It’s also above what the United States has been used to from the stock market in recent months (457k per month average for the first six months of the year). There, overall employment has even returned to pre-health crisis February 2020 levels.
Job creation affected all sectors of the economy. They were particularly numerous in the leisure and hospitality (+96,000), business services (+89,000) and healthcare (+70,000) sectors. “There is no evidence that the slowdown in housing and manufacturing activity is translating into weaker job growth”notes Michael Pearce.
Again the 0.75 point bearing on the table
Faced with a job market too “hot”, according to the economist’s qualifier, the stock market’s dream scenario that the US Federal Reserve would soon stop raising interest rates (because inflation is slowing down) and even cut them earlier this year has just been shattered, to which the numerous statements to that effect by several central bankers this week bear nothing had caused. San Francisco Fed Chairwoman Mary Daly specifically said that the Federal Reserve’s job was ” far “ be ended in the fight against inflation.
According to calculations by the CME, based on Fed Funds derivatives, bond market operators again see the Fed raising interest rates by 75 basis points within a range of 3 to 3.25% (implied probability of almost 70%), rather than just 50 raises basis points just ahead of the release of the stats.
the bedroom 40 down 0.63% today to close at 6,472.35 ahead of the release of the US CPI for July next Wednesday, below the 6,500 point threshold. The wage figures in the labor market report raise fears of self-sustaining inflation. In July, average hourly wages rose more-than-expected, up 0.5% vs. June and up 5.2% y/y (4.9% exp. from consensus in July, down from 5.1% the previous month).
Banks and TotalEnergies have benefited
In the bond market, however, where August is considered the best month of the year, government bond rates have started to rise (and therefore fall) again. The US 10-year bond yield rose almost 20 basis points to around 2.86%. Yields on shorter-dated debt securities are also rising, albeit less steeply. The yield curve is steepening again as recession fears ease in the world’s largest economy, benefiting banks doing what’s called a maturity transformation: they borrow short-term to long-term.
At the European level, the industry index for occupations was up almost 1%, the best performer just behind the index of companies in the basic materials sector (mining) and ahead of oil companies. In Paris, agricultural loan Cac 40 gained another 2% after rising well yesterday on the release of its second quarter financial statements, better than expected thanks to record investment banking activity (sales of corporate volatility hedging products). in courses, currencies, commodities).
Recession fears, particularly in England, where the country’s central bank has announced it will come later this year, explain the 12% drop in oil prices this week. But even if the price of Brent from the North Sea remains below the $100 per barrel threshold this Friday, it has risen since 2:30 p.m. to just under $96 (+2% compared to yesterday).
Total Energiesfell for most of the session and closed with a gain of 0.5%.