What did last week s non farm payrolls tell us
Last week’s poorer-than-expected non-farm payrolls took investors by surprise. City Index Market Strategist Joshua Raymond explains what this means for the markets. Last week’s non-farm […]
Last week’s poorer-than-expected non-farm payrolls took investors by surprise. City Index Market Strategist Joshua Raymond explains what this means for the markets.
Last week’s non-farm payrolls were a blow to investors who were hoping for the data to show that the US labour market recovery was gaining in strength. Payrolls for May pointed to a growth of 431,000 jobs when the market had been expecting a growth of as much as 513,000 jobs.
Private employment data was equally troubling. Private employers created much fewer jobs than expected, only 41,000, choosing instead to increase working hours.
The stock market reaction was swift and severe, with a broad-based sell off causing the FTSE 100 to fall by 90 points within minutes of the announcement. The reasoning behind the sell-off is that the non farms are a key bellwether to the strength of the US economy.
With both non-farm and private payrolls missing expectations, investors will inevitably question the strength of both the labour market recovery and its impact upon wider US growth at a time when the market is hoping for a sustained bounce in consumer spending.
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