Americans don’t want to work anymore?

By 10/05/2021News
morning-news

Gold  1835,225
(+0,17%)

EURUSD   1,2156
(-0,10%)

DJIA  34772,50
(+4,61%)

OIL.WTI  65,225
(+6,73%)

DAX   17407,50
(+1,49%)

All talk of a quick recovery of the US jobs market and thus an imminent rate hike was shattered by the harsh reality on Friday. The new job creation and unemployment figures came out as a failure.


S&P 500

S&P 500

Almost 1 million new jobs were expected to be created. In fact, it turned out to be about 270 thousand. Analysts had forecast an unemployment rate of 5.8%, in fact it turned out to be 6.1%. It was very far from what analysts had expected. For the analysts, of course, this is bad. But for the stock markets around the world it is good. A very weak labour market report would loosen the Fed’s rhetoric. We won’t be hearing about a monetary policy tightening anytime soon. There will also be less talk of an inflationary spiral.
In a bid to prop up the economy, the Donald Trump and Joe Biden administrations have been pouring money into the economy. And they continue to do so. Particular attention is directed at unemployment benefits, which in many cases are more (including state-specific supplements) than the person previously received at their job.
The result is complete absurdity. Why would a person go out to work, guaranteeing a lower standard of living and drastically reducing the amount of free time they have?
This absurdity has direct proof. According to the same Friday data, pay has risen much more than analysts expected. That is, with 10 million unemployed in the US, employers are forced to raise wages because they cannot attract the right number of workers.
Added to this is another problem. The shortage of raw materials. It is the one that has caused the prices of oil, copper, lumber and virtually all recyclable products to skyrocket.
And now what the analysts will not start talking about until a month from now. The current situation (high benefits preventing people from going to work + a shortage of raw materials) will lead to a slowdown in the US economy. Corporate reports for the second quarter could be much worse than expected. As a result, inflation could fall to 2% by the end of the year. And there will be talk of a new Fed stimulus programme.

03.03 Australian retail sales for March
10.30 EU Sentix investor confidence indicator for May


Important Notes on This Publication:

The content of this publication is for general information purposes only. In this context, it is neither an individual investment recommendation or advice nor an offer to purchase or sell securities or other financial products. The content in question and all the information contained therein do not in any way replace individual investor- or investment-oriented advice. No reliable forecast or indication for the future is possible with respect to any presentation or information on the present or past performance of the relevant underlying assets. All information and data presented in this publication are based on reliable sources. However, Bernstein Bank does not guarantee that the information and data contained in this publication is up-to-date, correct and complete. Securities traded on the financial markets are subject to price fluctuations. A contract for difference (CFD) is also a financial instrument with leverage effect. Against this backdrop, CFD trading involves a high risk up to the point of total loss and may not be suitable for all investors. Therefore, make sure that you have fully understood all the correlating risks. If necessary, ask for independent advice.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.