Opening Statement from the February 2019 CCPM Forecaster 

Opening Statement from the February 2019 CCPM Forecaster 

Originally published on February 3, 2019

Overview

There’s really nothing new to report relative to the January issue other than a pause in rate hikes as expected. The U.S. economy remains strong relative to much of the world with particular loss of momentum in the EU and Japan. Meanwhile, China’s weak economic data have investors optimistic that more economic stimulus is on the way.

Although investor sentiment is considerably strong than the previous two months, all signs point to continued weakness in commodities going forward.

U.S. Employment Data

On Friday, February 1, the US Bureau of Labor Statistics reported that 304,000 jobs were added in January, smashing the consensus estimate of 165,000. However, the BLS revised job growth from the prior two months down by 70,000, bringing the three-month average to 241,000 jobs.

Particularly encouraging were data measuring the employment-to-population ratio (EPOP) which rose to 60.7 for its highest reading during the post-crisis period. Even more impressive was the rise in the EPOP for prime-age (aged 25 to 54) male and female employment, from 86.1% to 86.5% and 73.4 to 73.5%, respectively marking the highest readings during the post-crisis period.

Strangely, the impressive jobs data failed to boost the U.S. stock market beyond a negligible amount perhaps due to the overhang of numerous uncertainties and concerns such as U.S. trade negotiations with China, continued loss in economic momentum throughout much of the world during a period of record-low but gradually rising interest rates coupled to excessive debt.