Weak job data gets off wake-up call to US economy

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Weak job data gets off wake-up call to US economy

On Friday, the 7th of June 2019, US Labor Department had unveiled US Job data for May showing that the US job growth had been slowed steeply last month and the wage growth was slowed less than anticipated, triggering frets that an unprecedented downturn of US economic momentum could spread into the labor market, which would eventually put pressure of Federal Reserve to slash interest rate in a near-term outlook.

More importantly, the Friday’s (June 7th) Labor Department’s data revealing a broad-based cooling down on hiring was based on the data before the latest escalation of trade tensions between two out of its three major trading partner, China and Mexico, meanwhile United States seemed to be averting trade tension with Japan, its third major trade partner, despite a widening of trade deficit.

In point of fact, following the reveal of Friday’s (June 7th) data, analysts had cautioned that the escalating trade spats could soon impact US economy, which has been set to celebrate its tenth straight years of expansion, the longest on record.

Adding that an interest rate cut “more likely” after Friday’s (June 7th) job data, an economist at Bank of America Merrill Lynch in New York, Joseph Song said, “Today’s report makes a cut more likely, and supports our view that the trade tensions will ultimately slow growth enough for the Fed to respond in September and December with cuts”.