Friday, this week’s main economic event comes when the US government publishes employment data for May. Before that, there were three fairly important data points on Wednesday Wednesday, and all flashed unexpected.
The first to strike was ADP Private Payrolls for May and this report showed the addition of only 37,000 jobs last month, very timid of expectations of 115,000 and well south of 60,000 years already low in April. It was the sweetest ADP number since March 2023.
“ADP Number,” said President Trump on his social truth. “” Too late “Powell must now reduce the rate.”
The next step was May Ism Services report, which arrived at 49.9 against 52 expected and 51.6 in April. A number of less than 50 shows the contraction and the MAY report was the first time in this area in one year.
Finally, the American federal reserve has published its beige book for May, which has shown even more sweetness in the economy. “Economic activity has decreased slightly since the previous report,” read the survey. “Half of the districts have declared slight to moderate activity reductions, three districts have not pointed out any change, and three districts have pointed out a slight growth … The perspectives remain slightly pessimistic and uncertain, unchanged from the previous report. However, some district reports indicate that the perspectives have deteriorated.”
Adding, the new data sent the US Treasury ticket at 10 years of age plummeting ten base points at 4.36%, its lowest level in one month. He also had the chances of a drop in the July rate increasing to 29% against 22% a week ago and the chances of one or more rate drops in September, going to 76% compared to 58%.
Where Bitcoin?
Shibboleth this bitcoin
Need an easy feed to rally may no longer be, if ever. The largest crypto in the world has climbed almost 50% in mid-April to a new record two weeks ago, even if a series of Fed officials have continually declared that they did not need to reduce rates.
However, a softer monetary policy of the American central bank would probably not hurt. For today, at least, Bitcoin is not impressed by the idea that the rate reductions arrive sooner than late, continuing to exchange very calm around the level of 105,000.
The Friday government’s jobs report is likely to be essential. Another poorer than expected print could be closer to a drop in the rate of the Fed or cuts this summer, and transform the image of the interest rate of a front wind to a rear wind.
Economists’ forecasts are for the United States for adding 130,000 jobs in May with the stable unemployment rate to 4.2%.
Real slowdown
“The ADP report signals a real slowdown in labor demand, especially among SMEs (small and medium -sized enterprises) which modestly lose jobs – important because SMEs generally have about 2/3 of employment growth,” said Marc Ostwald, chief economist and global strategist at ADM Investor Services International, in Coindesk in an email. “It is not entirely insufficient only all political uncertainty and, above all, ambiguity.”
“I suspect that repression on immigration (legal and illegal) shrinks which was a very abundant basin of qualified and unqualified work, and competition warms,” he continued. “On the sidelines, it creates additional inflationary pressure, in addition to prices and measures to secure the supply chains which will necessarily add to the operating costs of companies.”
“How long it persists depends on the duration of the slowdown, and the more it lasts, the more the risk of greater layoffs, which, outside of highly specialized areas, would probably be quite heavily on wage growth, because employment safety would go to the forefront of employee considerations,” concluded Ostwald.
