Morning Brief – US Employment

Humphrey Percy
Chairman and Founder
Mon 6 Mar 2023

US Employment

Fasten your seatbelts for a big week on the US jobs front. After 517,000 new jobs were created in January, the expectation is for February to reflect growth in jobs but much less-200,000 in fact. At present US unemployment is at its lowest level since 1969 so the argument that the Federal Reserve is operating off incorrect and frothy data is wearing increasingly thin. On Tuesday Federal reserve Jerome Powell is testifying to the Joint Economic Committee ahead of Jobless Claims on Thursday and Non Farm Payrolls on Friday. Expect him to reiterate his uncompromising stance on raising interest rates.
EUR/USD 1.0630.


With the Euro area inflation rate at 8.5% and core inflation not showing signs of topping out at 5.6%, it is unlikely that when ECB President Madame Lagarde speaks on Wednesday that she will give any other message than that interest rates will be going up by 0.5% on March 16. That would take the total of ECB increases to 350 bps since July. A further increase is expected in May after a pause in April. These days 2 months for Central Bank policy is a very long time. GBP/EUR 1.1320.


Just as a reminder, despite lock down and trade wars with both the USA and Australia, China still recorded growth in 2022 of 3%. China has now set a target of 5% economic growth for 2023 as widely expected. The other headline worth noting is the budget for defence spending which shows an increase of 7.2% ie in excess of the target growth rate. China now spends an absolute amount only surpassed by the USA. 
USD/CNY 6.9040.

US Personal Consumption

US Credit Card debt now stands at USD 0.986 Trillion. To put that in perspective it stood at USD 0.84 Trillion 1 year ago. So positive for the US economy that retail consumption is helping stimulate the economy, but expect to hear more about the ever increasing levels of personal debt and the incentives ie encouragement offered by finance houses to get consumers to take out even more credit cards without obviously demanding a reduction in the absolute levels of indebtedness.

My Way

It was this day in 1994 that 78-year-old Frank Sinatra collapsed on stage in Richmond Virginia USA while singing his best known hit. Redoubtable trooper that he was, he waved to the crowd as he was stretchered off. Fortunately the end was not there in Richmond for him that night and he went on to make a full recovery. Here it is:

And now the end is here
And so I face that final curtain
My friend I’ll make it clear
I’ll state my case, of which I’m certain
I’ve lived a life that’s full
I traveled each and every highway
And more, much more
I did it, I did it my way

Regrets, I’ve had a few
But then again too few to mention
I did what I had to do
I saw it through without exemption
I planned each charted course
Each careful step along the byway
And more, much, much more
I did it, I did it my way

Yes, there were times I’m sure you knew
When I bit off more than I could chew
But through it all, when there was doubt
I ate it up and spit it out
I faced it all and I stood tall and did it my way

For what is a man, what has he got?
If not himself then he has naught
Not to say the things that he truly feels
And not the words of someone who kneels
Let the record shows I took all the blows and did it my way

Discussion and Analysis by Humphrey Percy, Chairman and Founder

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