A number of interesting macroeconomic publications are planned for the end of August and the beginning of September. Data from the U.S. labour market, inflation, GDP for the second quarter or PMI reports. All this may indicate the strength or weakness of the V-shaped recovery in the global economy.
It is worth starting from the fact that the American economy has lost about 22 million jobs (more or less as many as there are people working in Poland). Since the government lifted some of the restrictions, about 9 million jobs have been restored. According to the market consensus, another 1.5 million jobs were to be created in August. This would then mean that about half of the employment was recovered, and if there is no second lockdown in the autumn, there is a chance for further improvement.
However, the August figures must take into account the fact that some of the states have seen an increase in the COVID-19 cases again, forcing the state authorities to react more sharply and to introduce restrictions again. This has led to the closure of many companies and a renewed loss of jobs. All this is due to concerns about the healthcare system and the number of staff, equipment, and beds in the hospitals. It is, therefore, possible that the data published on Thursday 4 September may be somewhat disappointing.
The U.S. employment data will be even more closely followed by the markets from this week on, as Jerome Powell announced on Thursday, August 27th that full employment will now be a priority for the Fed, not inflation. The worse the situation on the labour market, the looser the US monetary policy can be and the more help can be expected.
On Tuesday 1 September, inflation data from both Poland and the euro area will be published for August. Issues related to price levels, after the change of the monetary policy framework by the Fed, may be very important. Other central banks of the world may somehow respond to what Jerome Powell proposed in the passing week.
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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