On Thursday, the 13th of June 2019, data released by US Labor department on early US trading hours had revealed that the number of American citizens filing for unemployment benefits for the first time had spiked sharply, while continuing claims had also surged, added to an unfathomable fret that the US Labor market had been losing its fuel after job growth fell to multi-month lows last month.
Besides, there had been a basket of lackluster data including a faltered import price index, which fell by the most to five-month low in May amid a decline in cost of consumer good, pointing towards a subdued inflation pressure looming over US economy.
Following the reveal of Thursday’s (June 13th) US Labor Department’s data, several analysts had been quoted saying that the latest deflation in imports would be supporting investors’ expectation of an interest rate cut by September this year.
None the less, Fed policymakers were scheduled to meet on June 18th-19th over the narratives of rising geo-political tensions, while financial markets had been betting on at least two rate cuts by the end of 2019, however, a rate cut was not expected on next Wednesday’s (June 18th) Federal Reserve meeting ahead of a G20 summit later this month which might have headed off some of the trade tensions.
Referring to uncertain business outlook in context of an intensifying Sino-US trade conflict, a US economist at Oxford Economics in New York, Jake McRobie said, “Combined with increased business uncertainty from rising trade tensions and slowing domestic growth, softer inflation should prompt the Fed to ease policy by year end”.
According to the Thursday’s (June 13th) Labor department’s data, initial jobless clams rose to a seasonally adjusted 2,22,000 for the week ended in June 8th, while Wall Street Analysts’ poll had been expecting a drop of 3,000 to 2,16,000 last week, hinting that a ten-month-long trade war had begun to take death toll over US economy.