Us Economy Remains Strong

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Us Economy Remains Strong

US Economy And Labor Market Remains Strong In Q2 2023

During the 2nd quarter of 2023, the US economy and the US labor market remained strong, which is a good sign for the equities & the FX market. However, the government shutdown is fast approaching unless something is done about it.

Similarly, the US auto workers are also on strike, which is highly likely to diminish the outlook for the remaining months of 2023. Looking at the labor market reveals that it remains tight, with a slight increase in the number of people filing for unemployment benefits.

November Rate Hike May Happen

According to some experts, the resilience shown by the labor market and the overall economy will give confidence to the Federal Reserve. As a result of this, we may see a rate hike during November's meeting as well. However, some believe that the economy is under a dark cloud, which means the Fed will have little room for any more rate hikes.

Christopher (an analyst from FWDBONDS) says that the jobless claims are at record lows, which signifies a strong labor market. At the same time, the economic demand is also showing no signs of rebalancing yet. However, let's not forget that inflation is still not under the Fed's control, which may warrant more rate hikes.

The USD GDP growth is around 2.1% on an annual basis based on the last quarter results. For the most part, this was exactly what the economists were expecting from the US economy.

During Q1 of 2023, the US economy grew by 2.2%, which was higher than the 2% growth of the previous quarter. From a US perspective, that's a good growth rate, given the global macroeconomic dynamics. If we look around, even China is having problems with sustaining a high growth rate.

Overall, the bigger economic picture is in line with what the Federal Reserve wanted & thus will give more legroom to the US Dollar against its rivals.

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