Traders cautious after woeful February report
It’s been a mixed start to trading on Friday, as we await the latest jobs report from the US.
US futures are marginally higher but we have lost a little momentum. That may simply be because we’re awaiting the latest labour market data from the US, a report that is arguably the most closely followed each month.
It also comes after a dreadful month of job creation in February when only 20,000 were added, although the data has been very inconsistent since the shutdown and another revision may come today.
Broadly speaking the labour market remains very strong and the economy, while slowing, is very healthy. With unemployment running at only 3.8% and wages rising at 3.4% annually, there’s clearly nothing to worry about just yet.
That said, the US is not immune from the global slowdown and investors will only accept weak job growth for so long. It will be interesting to see what happens today if we get another bad reading, especially if it isn’t accompanied by a big revision to the February number. The market is not expecting this though, with around 180,000 forecast.
The greatest threat to the economic outlook remains the trade war between the US and China. While we have seen clear progress in recent months, the last part of the negotiation is expected to be the most difficult and drawn out. Trump remains optimistic about a deal but less confident about the timing.