US: No need for excessive pessimism – BNP

By FXStreet Analysts from BNP Paribas, explained that the US labour market has been losing momentum, which could be additional evidence of the soft patch the economy went through in early 2016 and could also signal further slowdown on the horizon.

Key Quotes:

“The labour market is stabilising, with enough job creation to keep the unemployment rate unchanged. On a broad measure, the absorption of underemployment has come to a halt.”

“Although that could be cause for concern, it is also partly due to the brief dip in activity in early 2016. In any case, this makes the Fed’s cautious stance easier to understand.”

“The message provided by economic data – both hard and soft – is rarely unequivocal. Contradictions can often be found within the same survey, which is why it can be easier to read data pulling together them into a single indicator. As regards the economic outlook, our in-house indicator is the M&N, a weighted sum of data from the two ISM surveys. The message from that indicator is that the US economy has slowed in early 2016, with activity falling back to the previous post-recession low points, but also rapidly bottomed out to strengthen in March and April.

“The fact that the …read more

Source:: FX Street