The February non-farm payrolls were a welcome surprise as they rose by 273 thousand, the most since
March 2018 and the unemployment rate dipped to 3.5% from 3.6%. It appears that the US economy is
still in good shape and quite a way off from entering recession territory, even with the stock market in a
persistent dive.
There are various reports that the Fed will cut its base rate by another 25 basis points shortly, but the
move may have to wait a bit even with the horrible stock market figures. After all, the employment
numbers for February were extremely good. What the March numbers will be is anybody’s guess
considering that the coronavirus is spreading havoc around the globe. The impact on supply chains is
apparent, but it is not yet clear how severe the impact is on global growth.
We will have to wait for more economic releases before a good evaluation can be made. Meanwhile
educated guesses will have to suffice. We anticipate that employment world-wide will shrink and that a
recession will hit us by mid-March, early April. Oil prices have sunk to well below $50 per barrel and are
approaching $40.