Monday, June 28, 2010

Economic Outlook: Worsening picture in the US

By Jack Farchy

Investors will this week be bracing themselves for signs that the US recovery is slowing, as a slew of economic data on the world’s largest economy is expected to paint a downbeat picture.

However, they face a challenge disentangling the effects of the removal of government stimulus programmes from the scale of the private sector recovery.

ChartThis week sees the release of the monthly US non-farm payrolls report, the most closely watched statistic in global markets.

The headline figure is expected to show a sharp drop in non-farm employment – but that is largely the effect of temporary workers hired to carry out the US census coming to the end of their contracts.

There was a decline of about 250,000 in the number of people working on the census this month from May, leading to consensus expectations of a drop of 75,000 in the headline non-farm payrolls figure.

That could push the US unemployment rate above its current level of 9.7 per cent, leading to fears that the recovery might stall.

Economic Outlook: Worsening picture in the US

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