Daishin Securities judged on the 5th that it is difficult to see the U.S. economy as being on the brink of recession based solely on the July employment data.
On the 2nd (local time), concerns about a recession spread following the announcement that the U.S. employment situation in July had worsened, causing the three major indices of the New York Stock Exchange to close lower. The unemployment rate surged to 4.3%, and the number of new jobs increased by 114,000, showing a reduced growth rate, with both household and corporate data falling short of market expectations. In response, Lee Joo-won, a researcher at Daishin Securities, stated, "It is difficult to say that the U.S. economy is immediately on the brink of recession based on this employment data," adding, "Temporary factors such as hurricanes had an impact, and considering the personal total income growth rate, the employment market has not significantly deviated from the pre-pandemic equilibrium level."
Lee further commented, "With the initiation of interest rate cuts becoming visible in September and concerns about the economy emerging, the outlook on the magnitude of the rate cuts will now play an important role," predicting, "The market will react sensitively to whether the cut will be 25bp (1bp = 0.01 percentage points) or 50bp."
He also analyzed, "Ahead of the release of China's export and inflation indicators, China still shows weak signals of domestic demand recovery, and there are doubts about the sustainability of export growth as it faces the removal of tariffs on China and producer price index (PPI) deflation," warning, "It is necessary to be cautious about whether concerns over a U.S. recession might expand into concerns over the G2 economies."
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