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Ongoing concerns about a slower-than-expected economic recovery and weaker than expected US job market data weighed on early trading on Wall Street on Thursday.
After US Federal Reserve President Jerome Powell scared the markets the day before with his critical statements regarding an early economic recovery, weak US job market data now reflects these concerns. At nearly 3 million, more Americans have submitted initial jobless claims than forecast.
The data provide a timely insight into the current development of the economy. And it looks cloudy there. After all, the number fell after last week, which was expected. But in the past few weeks the total of those who lost their jobs due to the corona pandemic has increased to around 36 million. The situation on the job market is important for American consumer sentiment. The US economy lives primarily from domestic consumption.
“The pace of recovery is likely to be disappointing because the lifting of the blocking measures will not bring the economy to pre-crisis levels,” said portfolio manager Hani Redha of PineBridge Investments. Policy measures prevented depression, but are unlikely to prevent a deep recession. In contrast, the more optimistic scenario of a V-shaped, i.e. fast and strong recovery, has been repeatedly played on the markets in recent weeks.
“Rising unemployment worldwide and a wave of bankruptcies go hand in hand with a lack of certainty about when things will ‘return to normal’ and whether there will be a second wave of infections if economies try to recover,” added Fawad Razaqzada, market analyst at Think Markets.
Editorial staff finanzen.net / Dow Jones Newswires
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