The Day at a Glance | Jul 8 2022

The Top

*Unemployment in the United States better than expected: The unemployment rate remained at 3.6% and the non-farm payroll set at 372 thousand (vs 268e.).

*Shinzo Abe, Japan`s former Prime Minister, dies after being shot during an event.

*Member of the FED, Christopher Waller, and President of the St. Louis FED, James Bullard, expect a 75bp increase in July.

*Employment in Canada disappoints as it logged a decrease of -43.2 thousand.

*IMF doesn’t discard a global recession next year.

*The emerging bonds market faces a series of defaults worth $237 billion dollars.

Economic environment

Positive employment report in the United States. The US economy created 372 thousand new jobs during June, its highest level since January. The figure was positive as analysts expected 268k e., and confirmed a moderation in the labor market`s performance. This is good news as it shows strength in the US labor market despite more adjusted monetary conditions and mass lay-offs in some companies. The greater gains in employment were logged among professional services, leisure, hospitality and the health sector. The unemployment rate, for its part, remained at 3.6% for a fourth consecutive month – in line with expectations – which means that approximately 5.9 million people were unemployed in June. The participation rate remained at 62.2%. Lastly, wages increased slightly more than expected (5.1% vs 5.0%e. annual), a sign that wage pressures are not concerning for inflation at the moment. Overall, the data reveals that the market is strong with a large amount of jobs being created; although it`s becoming more moderate as time moves forward. We could soon see figures below 200 thousand, which would imply the end of the recovery after the pandemic. Otherwise, the FED would be expected to act more aggressively in order to cool down the labor market.