U.S. economy prospects

Lately the markets have been viewing the prospects of U.S. economy as continually deteriorating

In brief: The data on residential market published today may help one understand whether this opinion is grounded or not. By the way, the FED is also currently waiting for the publishing of the residential market report, in order to shape its course of monetary policy.

Recently B.Bernanke stated that the FRB is ready to intervene when required. One more disappointing report may push the FED to a new stage of quantitative easing strategy. Therefore, let us proceed to our monthly task of trying to predict the course of employment indicators using pay-roll record data.

Taking into account data distortion due to part-time employees, we are going to concentrate on private sector employment. So far, all figures are pointing to positive news, although we are still lacking data on the service sector (i.e. the most foolproof index), which are to be published after the pay-roll record data. The customer confidence has increased, along with the growing number of workplaces in the manufacturing industry and fewer dismissals. The market is expecting 42 thousand new jobs in the private sector. In case of a higher figure, it may back up the U.S. dollar, in the view of a delayed quantitative easing by the FED. We are also looking forward to the publishing of a report on business activity in the service sector. Although we use this index mostly for employment rate forecasts, it is worthwhile bringing into view the overall condition of the public sector making up a considerable part of the U.S. economy.

Igor Tringlers
2010-09-05 10:18, Economics.

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