Oh dear. It seems that the US economy hasn’t read the scripts about trade-wars destroying jobs. On Friday, the January US employment numbers were revealed to be much stronger than expected.
In America, employment numbers are released as Non-Farm Payrolls (NFP). I’m not sure why agricultural workers are excluded from the results. Maybe the statisticians figure that farmers are too busy to bother filling in yet another form every month?
In an average month, the NFP comes in at around +200,000. For January 2019, it was expected that the number would be slightly down, at 160,000. Given the government shutdown and the trade-war induced tariffs, this is how the economics profession expected things to turn out.
The actual result of 304,000 was a very pleasant surprise.
Clearly, managers, business owners and regular people of “Main Street” didn’t behave in the manner desired by the economic theorists. Maybe the “experts” need to instruct the general population with more clarity!
Tariffs and a trade war with China are meant to be negative on the economy. All those government workers waiting for their paychecks are meant to be negative for the economy. Even the “sugar-rush” of Mr Trump’s corporate tax cuts last spring were supposed to have been a negative for the economy as their one-off stimulation wore off.
So this stronger than expected economy means; –
1) US interest rates are more likely to rise by more,
2) the US dollar will be slightly higher, and
3) US shares perhaps a little weaker.