Another US employment report was released last Friday
(Good Friday), a Christian holiday. The BLS "had" to published this
report just before the holidays, hoping that few people would see it.
Figures for March were very bad, indicating the
creation of only 126 jobs, against an average expectation of 248, with the
lowest expectation of 200 thousand. So it was a very weak report as
we expected, but a big surprise for the market.
The BLS also revised the numbers for the previous
employment reports and reduced the number of jobs created by 69mil.
According to the revised January report, 201,000 jobs were
created instead of 239mil. According to the revised February report,
there were only 264,000 jobs created, compared to the previously disclosed
295mil. They fixed the mistakes, which we have been pointing out for
some time (see previous posts), when we said that the numbers appointed by
the BLS were less than accurate.
To make it even more interesting, the participation of
Americans in the labor market reached a new record low since 1978,
with more than 93 million Americans out of the labor market.
This was a shock for those who expected that the Fed
would raise interest rates from mid-2015. In her last speech, Janet Yellen,
president of the FED, made it clear that she was keeping an eye on the
labor market and any rise in interest rates would be dependent on this
indicator.
As we have been saying, there is no improvement
in the US economy and the lack of QE will make it more visible.
And, again, we need not to discuss the quality of jobs
created – as usual, many part-time and low value jobs were added.
It is noteworthy that the part-time jobs, responsible
for much of the creation of jobs in recent months, work well in an
uptrend (when two part-time employees are hired in place of a full-time
employee), but are disadvantageous for the Government in the
downtrend, with the opposite effect. Many companies laid off workers who
worked full-time and hired new employees working part-time and this improved
the numbers. When these companies begin to cut back, the number of
layoffs will be scary.
We believe that the US dollar will weaken further.
It gained strength in recent months with the market expectation of an
imminent rise in US interest rates. As we now know, this rate rise will not
come anytime soon ...
Again, an exposure to precious metals work as an
excellent hedge against a weak dollar.
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