On Friday, the US Labor
Department released the official jobs numbers for the month of March. The
numbers provided some relief to the market, which was worried about the weak
jobs numbers in February. In March, the economy added more than 196K jobs,
which was higher than the expected 176K. In February, the economy had added
just 20K jobs. The unemployment rate remained at 3.8% while the participation
rate declined slightly to 63%. The main concern among participants was the
slowing wage growth. In the month, wages slowed down to an annualized rate of
3.2%. The U6 unemployment rate declined to 7.3%.
On Sunday, the Homeland Security
secretary, Nielsen Kirstjen announced that she was resigning. This is as the US
continues to experience increased border crossings. While most of the Mexican
border crossing has reduced, that from Central America has continued to
increase. The problem is that there are no tools in place to handle the ongoing
migration. In fact, Donald Trump has considered closing the border, a move many
experts believe would have serious repercussions on the US economy. In recent
months, Democrats have opposed many measures to control the border.
The Brexit impasse continued over
the weekend as the UK failed to pass a deal on how to deal with the European
Union. Since the UK parliament has failed to pass any meaningful proposal on
Brexit, it is now expected to leave the EU on Friday this week. However,
Theresa May has asked for an additional extension from the European Union. Its
leaders are hesitant that further delay may affect the bloc’s growth. In a
statement, Emmanuel Macron said that he would be willing to give an extension
if the UK agreed to a set of conditions. One condition is that the UK should
not use its membership in the EU to disrupt the operations of the bloc.
Over the weekend, investors
continued to focus on the new wave of global synchronized slowdown. Since
autumn, sentiment and other data from the developed and emerging markets have
been on a slowdown. In a statement, Christine Lagarde of the IMF, said that the
organization might be forced to cut the forecast for the global growth later
this week. This will be the third cut from the organization in the past few
months. It also comes at a time when other organizations like OECD, Fed, and
World Bank have slashed their guidance.
The decision by Donald Trump to
appoint Herman Cain as a board member of the Fed continued to be debated in the
United States. Cain is a former CEO of a pizza chain, a former board member of
the Kansas Fed, and a current supporter of the president. Cain heads a political
action committee, which has spent millions of dollars boosting Donald Trump.
This comes after another Fed appointee, Stephen Moore has been criticized for
his previous predictions. Traders fear that appointing loyalists to the Fed may
lead to a loss of confidence in the Fed.
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