The latest data reveal significant weaknesses in the U.S. job market, highlighting the government as the primary source of new employment. Market reactions include falling interest rates and a declining dollar.
Initial Jobless Claims: 238K (up from 233K; expected 235K)
Continuing Jobless Claims: 1858K (up from 1839K; expected 1840K)
Trade Balance (May): -$75.10B (previous -$74.60B; expected -$76.30B)
This is one of the main data that the Fed looks at to lower interest rates, right?
Yes but we want private sector growth
What do you think will happen to the American economy when rates start to fall?
Depends on inflation, if inflation target 🎯 remains under 2 percent
Lower rates should mean more commercial activity
The other question is will the bond yield curve remain inverted
I've heard many economists say that when rates fall the market will crash, how true can this be? because they supposedly discount that something bad is happening in the economy and that is why they lower interest rates.
A sharp fall of rates normally anticipates a deep recession. This will make investors reduce their holdings while insolvencies rise etc etc. The market crash is the bursting bubble that follows when the herd leaves the room, needs cash
This is what usually happens, that is, there has never been a fall in interest rates without a recession, or I am wrong
I do not remember any other important case.
I don’t understand that reasoning either
But this is what has usually happened during past interest rate cuts.
The cut is the sign of weakness and normally follows after they broke a market or a segment like banks
Don't overrate the CBs influence on the bond market. Long term thr market is in full control and after a possible deflationary shock rates will explode higher
A fast credit boom. Than a sharp rise hand high yields over multiple years to eliminate bad debt
I understand, and what do you think will happen with equities?
Sluggish growth
Stagflation
It is clear to me, nothing good...
1970s had this roller coaster 🎢 trend
Up then down up then down…
It's the most important, yes
Anecdotally, I've know more than a couple people who are applying and interviewing for gov jobs. I hope that is a choice I never have to make. The part of the interview process that includes having your friends be interviewed to vouch for your character...by the gov.....no. You can keep that. Just creeps me out.
Incredible! Here in Spain there is nothing better in the eyes of the masses than hiding behind a gov desk
curious! in the eyes of the masses, is hiding behind a gov desk implicative of a safe, comfortable life?
absolutely. the state has displaced the private sector here to such an extent that it retains a 60% state quota for itself. after all, people can earn next to nothing anymore
Strong warning signs we are already in a recession. Hold onto your jobs while you can! It is important to remember government jobs aren't a net benefit to the economy, rather a parasite.
Weakness is here in the economy!!!
Exactly. And save what You can!
Biden is creating jobs in preparation for election. He thinks that this way he can turn US in his favour. But I doubt it will happen.
That's how democracies usually die
I have had family tell me to apply for a government job because they pay a pension.
Which can be nice.