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US Payrolls and wages disappoint, while jobless rate fell to a 48-year low

Oct 8 • Morning Roll Call • 78 Views • No Comments

On Friday the most anticipated economic news came with a disappointment, where the September nonfarm payrolls rose 134k after a gain of 270k in August, while the expected reading was 185k. The average hourly earnings rose 2.8% from 2017 that has matched the projections, whereas the unemployment rate dropped more than expected, coming at 3.7%, as opposed to the forecasted 3.8%. The current jobless rate is currently on the lowest level since 1969.

According to Bloomberg, hiring may gain a more sustainable pace after a strong run, assisting the economy to come closer to full employment and has strengthened the expectations for a 4th interest rate hike by the Fed in 2018.

On Thursday the BdB banking association had lowered the growth forecast for Germany, and on Friday Wifo (Austrian institute of economic research) and IHS have altered their economic forecasts for Austria lowering the GDP growth for 2018, to 3% from 3.2% and 2.7% from previous 2.9% respectively. The main factors influencing the change is the growing concern over Brexit and the US trade policy. In addition, Wifo expects the growth to slow to 2% in 2019, as opposed to the previous forecast of 2.2%, again based on the same factors that are slowing the GDP growth this year. It is expected that the Austrian export growth will be affected as well as the willingness of companies for further investments, where it cannot be expected that the private household spending will be able to fully compensate for the decline in export demand.

We have also witnessed on Friday the weak reading from France regarding the trade balance, where the trade deficit widened more than expected in August and recorded a trade deficit of 5.6 billion, as opposed to the forecasted 4.5 billion. The trade deficit was widely influenced by the fall in aircraft exports and the rise in energy bills.

ECONOMIC CALENDAR EVENTS FOR OCTOBER 8th

AUD ANZ Job Advertisements m/m
CHF Unemployment Rate
EUR German Industrial Production m/m
EUR Sentix Investor Confidence

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