The whole world is still fighting the epidemic of coronavirus and the economic consequences that governments and central banks are facing on every continent. At the end of March and the beginning of April attention may be paid to data from the US labor market, but it may be too early to estimate the impact of COVID-19.
The NFP (non-farm payrolls) report in the United States will show us only some of the data from March. The study period does not cover the entire month, hence the April 3 publication may not reflect the full-scale impact of coronavirus on the US labor market. Full data will show only the March revision. Nevertheless, the current consensus assumes that the number of jobs in the US has been reduced by almost half a million full-time jobs. In turn, the unemployment rate may increase from 3.5 to 4 percent. These data can then be revised, and the picture of the US labor market may then deteriorate further.
Before we get the data from the labor market, it is worth paying attention to the publication of the ISM report for both manufacturing and services. This report may show how much the US economy could sink and how close it might be to the recession. Deep recession.
For this reason, statements of American politicians, including US President Donald Trump may be of key importance. Despite the introduction of an aid package worth USD 2 trillion, it is possible that further assistance measures will be needed. It is also worth paying attention to the statements of Donald Trump on the re-launch of the economy quickly, including all security procedures. The US president talked about this at the end of March, because the United States cannot afford a very long downtime.
The final readings of the PMI reports from the euro area, as well as the publication on inflation, may be important. Currently, the consensus assumes that in March inflation in the eurozone will fall to only 0.8 percent. in turn, the PMI for services can be confirmed at 28.4 points.
Daniel Kostecki, Chief Analyst Conotoxia Ltd.
Materials, analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal opinion of the author does not represent and should not be constructed as a statement or an investment advice made by Conotoxia Ltd. All indiscriminate reliance on illustrative or informational materials may lead to losses. Past performance is not a reliable indicator of future results.
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