The Day at a Glance | May 5 2023

*The US unemployment report once again surprised to the upside, accompanied by a drop in the unemployment rate. 

*Retail sales in the Eurozone fell more than expected in March. They logged a monthly -1.2% setback and -3.8% annual, its worst figure since January 2021. 

*The Caixin services PMI for China corresponding to April recorded a 1.4 point decline with respect to the previous month, setting at 56.4 points – below the expected 57.0. With this, the composite index fell 0.9 points and set at 53.6. 

*Yevgeny Priogozhin, leader of the Wagner Group, the private military company hired by Russia, commented that he will withdraw his troops from the Ukrainian city of Bakhmut due to insufficient support from Moscow. 

Economic environment

The US employment report logged 253 thousand new jobs in April, widely surpassing the 185 thousand expected by markets and the 236 thousand created in March. With this, in the first 4 months of 2023, 1.138 million jobs have been created in the US economy. In a disaggregate manner, the services sector was the main contributor to the monthly reading, with 130 thousand jobs compared to 112 thousand in March; while manufacturing activities created 11 thousand positions, contrasting with the expectation of a 5 thousand decrease. In addition, these figures were complemented by the unemployment rate, which fell 0.1 percentage points and set at 3.4% in April, below the expected 3.6%, while the labor force participation rate remained unchanged at 62.6%. Lastly, the average wage rate recorded an acceleration in its monthly and annual variation to 0.5% and 4.4%, respectively, from the previously recorded 0.3% m/m and 4.2% y/y. All in all, April`s data continued to show a very tight US labor market, which should lead the FED to maintain its tight stance in the coming months.

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