🌍 Global Economic Snapshot 📈💼
📌 Strong US job market
📌 Inflation concerns
📌 Banking crises
📌 China's restrained growth
The global economy continue to dance to the rhythm of the nasty macro situation. 🧵
Macro Pulse Update 09.06.2023
1️⃣ US jobs are booming
2️⃣ Inflation stay high for longer
3️⃣ Future for US banking system
4️⃣ China's slowdown a threat
1️⃣ US jobs are booming 🟢
Job growth in May surpassed expectations, indicating a healthy employment market.
However, the household survey presented contrasting data, with stagnant labor force participation and an increase in unemployment.
Usually, household survey tends to be more volatile.
Overall, the job market seems to be holding up, with various industries experiencing growth, except for manufacturing.
Wage inflation has slowed down, which could help curb inflationary pressures.
Although there are differing views on the possibility of a recession, the positive employment report has sparked optimism among investors.
Equity sees a positive reaction to prices.
2️⃣ Inflation stay high for longer🟡
Surprisingly, labor-market conditions played a minor role in the inflation surge, but their impact on inflation is likely to grow over time.
For inflation to be under control, there needs to be balance between labor demand and supply.
Steps taken by the Fed could have been effective.
There is a lag for the effects of monetary policy to be visible. So, only time could tell if the policies were indeed effective to bring down inflation.
3️⃣ Future for US banking system 🟢
The recent banking crisis wore down the overall economy.
Thanks to prompt actions by the Fed and Treasury, the crisis was contained, avoiding a financial meltdown.
Although there were some lingering effects on credit markets, the situation seems to be returning to normalcy.
Deposits have started to recover.
Interesting point of view
4️⃣ China's slowdown a threat 🔴
China's sluggish economic growth is impacting global commodity markets, leading to sharp declines in prices of metals like copper, iron ore, and steel.
As China is a major consumer of commodities, the impact is felt globally
Various factors point to economic weakness in China, including decelerating retail sales, declining industrial production, and weakened private sector investment.
The unexpected decline in the manufacturing PMI further added to concerns, signalling a continued downturn in manufacturing activity and weak demand for capital goods.