The Labor Department released numbers this morning showing that U.S. employment gains were slower than expected. However, the numbers are promising in showing that we are still seeing the labor market recovery. The unemployment rate fell to 4.9%, the lowest it’s been since 2008. The rate was expected to be slightly higher at 5.0%, the number we saw in December. Nonfarm payrolls also came in lower than the expected 188,000 at 151,000 jobs last month – both lower than the 292,000 reported for December.
The positive jobs report came after some less encouraging news regarding economic conditions, causing increased talk of a potential recession in the future:
- The Fed released a statement on Tuesday stating that financial conditions are considerably tighter than they were a month ago and warning that the recent status of the financial market could change the growth outlook for the U.S. economy.
- The Bank of England announced yesterday that it is not raising interest rates for the 83rd consecutive time and also cut its growth rate forecast by 0.3%.
- The EU Commission cut its growth forecast for the Eurozone. Further, if Britain exits the EU, it could cost the EU an estimated 4% of GDP.
- Moody’s reported that the number of U.S. companies at risk of debt default is nearing the number last seen during the 2009 financial crisis.
Some see the glass as half empty while others see it as half full. Only time will tell which direction we are headed.
Yesterday, WTI crude closed down $0.56/bbl to $31.72, HO closed up $0.0019/gal to $1.0805, and RBOB finished up $0.0147/gal to $1.0284. Markets are trading a bit lower this morning and afternoon.