finished”Wall StreetThe week’s trading was unchanged following a volatile session following the strong jobs report, as it increased the complexities of the economic scene, leaving investors confused regarding how the bank would react. Central American With new jobs data when it meets this month to determine interest rates.
The June jobs report, which was released on Friday, showed an acceleration in growth above expectations, giving an indication that the US economy remains strong, reversing bets on a recession.
Jobs Report
and increased Jobs Nonfarm payrolls increased by 372K in June, higher than analysts’ estimates of 250K. The unemployment rate was 3.6 percent, unchanged from last May, in line with expectations. The alternative measure of unemployment, which includes workers employed part-time for economic reasons, also fell sharply, falling to 6.7 from 7.1 percent.
Average income rose 5.1 percent from a year ago, slightly higher than analysts’ estimates. This indicates that wage pressures remain strong as inflation accelerates. This increase in wages gives a signal to the Central Bank to take more strict decisions in its monetary policy, as expectations increased the possibility of raising the interest rate by 0.75 percentage points at its meeting during the current July (July). The job increases were concentrated in the educational and health services sectors to create job opportunities, in addition to professional and commercial services, entertainment, transportation, warehousing, manufacturing and others.
Slack control
This data comes despite the inflation rate, which is going at the fastest pace since the beginning of the eighties. To combat rising inflation, the Federal Reserve raised interest rates with the aim of slowing the economy without causing a recession. Despite this, recent economic indicators show that growth has slowed significantly, inflation has affected low-income households in particular, with credit card data from Bank of America showing that private sector spending fell by 1 percent. in June on an annual basis, an ominous sign for an economy in which consumers account for more than two-thirds of its growth. The private sector accounts for 85 percent of all jobs in the United States.
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downturn in the economy
The gross domestic product contracted by 1.6 percent during the first quarter, and is on its way to decline by 1.9 percent during the second quarter, which means that the economy has entered a recession that comes with a decline for two consecutive quarters. But economists still view the labor market as a bulwark once morest recession, as the June data showed.
However, there is some worrying data, as there remain large gaps in some of the industries most affected during the Corona epidemic, especially entertainment and hospitality, and total employment is still less than 1.3 million below the high level it was before the outbreak of the epidemic.
Wall Street confusion
On Wall Street, the picture was mixed, as the economic indicators became contradictory for investors, which makes it difficult for them to make a clear decision. On the one hand, jobs data gives an indication of the economy’s strength, while its growth counterpart gives another indication that the economy may enter a recession. This resulted in swing trading, as all three major indicators passed periods in both positive and negative areas.
But the “Nasdaq” index, which measures technology stocks, managed to record the fifth consecutive daily gain, on Friday, the longest consecutive winning streak since the beginning of November.
Semi-annual closings
And the American financial markets witnessed a bad semi-annual closing, in which the “Standard & Poor’s 500” index, which measures the largest 500 listed companies, lost more than 20 percent, but since the beginning of July, there is an improvement in stock markets, as investors seem optimistic With the possibility of falling commodity prices, and the central bank easing its strict policy to prevent the economy from entering a recession. In the context and over the week, the “Nasdaq” index rose by 4.5 percent, while the “Standard & Poor’s” and “Dow Jones” indexes advanced 1.9 and 0.8 percent, respectively.
