Today one of the most anticipated reports among investors was the latest unemployment data from the United States. An unchanged rate of 3.6% was expected, but the actual report for June showed an increase in unemployment up to 3.7%. This indicates a significant slowdown in the United States’ economy, despite a welcome rise in non-farm payrolls. The hourly earnings, though a less important metric of economic health, were also lower than expected. As a result, investors’ expectations of an interest rate decrease this month have solidified.
Things are also not so great across the ocean, as factory orders in Germany suffered a sharp decline by 2.2%, with an annual reading of 8.9%, which is the worst since the financial crisis of 2008. Recall that Germany is the most powerful economy in the entire European Union. If Germany is struggling, that’s representative of the whole bloc.
Moreover, there are fears that Donald Trump will impose trade tariffs on the EU as well, which is adding further pressure on European markets.
The bad economic data from all around the world is also pushing oil prices down. A lower industrial activity translates into lower demand for oil, despite the limited supply currently.
