shine trader limited reports:
The American economy hit a speed bump in the third quarter. This was when the Delta outbreak was running rampant through the country. With supply chains paralyzed as well, economic growth slowed down substantially.
On the bright side, this softness seems like an isolated phenomenon. Most of the data for the fourth quarter so far suggest the economic engine is up and running again, with PMI business surveys pointing to stronger growth ahead.
Better yet, Congress is about to deliver more spending. This has been a very slow process, and it may take a few more weeks, but it seems like it will get done. If both the infrastructure and the social spending bills pass, that could really power up the recovery.
Solid jobs report eyed
The labor market seems to have enjoyed a solid month in October. Nonfarm payrolls are projected at 450k, something that would push the unemployment rate down one tick to 4.7%. The catch is that the labor force participation rate remains muted, which artificially lowers the unemployment rate.
Wages are expected to have picked up too. Average hourly earnings are seen accelerating to 4.9% on a yearly basis from 4.6% previously, reflecting the tremendous inflationary pressures and the shortages of skilled staff that businesses are reporting.
As for the risks surrounding this report, most labor market indicators point to a positive surprise. The private ADP payrolls number clocked in at 571k, the Markit PMIs suggested that hiring picked up during the month, and jobless claims fell sharply during the NFP survey week. The only worrisome spot was the ISM services survey, which showed a slowdown in job creation.
Dollar looks better than rivals
In the FX arena, the US dollar has taken a breather lately but the overall picture remains encouraging. The American economy is already in better shape than Europe and China – which will likely take heavy damage from the energy crisis – and this lead could grow further if Congress delivers on its promises.
In turn, that implies inflation could remain scorching hot. Most of the spike in inflation so far was attributed to supply chain problems and energy prices going ballistic. But that seems to be changing.
article links：Will Nonfarm Payrolls Reignite The Dollar’s Uptrend
Reprint indicated source：Spark Global Limited information