Weak ISM data heralds approaching recession: US labor market data presented more positively than it actually is.

Weak ISM data heralds approaching recession: US labor market data presented more positively than it actually is.

According to a report by finanzmarktwelt.de, today's US labor market data is positive at first glance. They seem to support the narrative of a soft landing for the US economy. However, the number of new jobs from previous months was again revised downwards, full-time jobs disappeared and, above all, part-time jobs were created. The Biden administration has an interest in making these labor market data appear better than they actually are. Treasury Secretary Yellen said today that the US economy had achieved a soft landing. Nevertheless, the weakening service sector in the USA (ISM Index Service) indicates an approaching recession.

The impact of this data could be serious. The deterioration of the labor market situation, particularly in the service sector, indicates falling economic performance. This could lead to lower consumer demand and general market uncertainty. Investors could become more cautious and stock markets could lose value in the face of the impending recession. This could also cause interest rates to fall as the Federal Reserve could take action to support the economy.

Overall, the current labor market data shows that the US economy is facing major challenges and price developments on the financial markets could be fragile. It is advisable to closely monitor further developments in economic indicators in order to make informed investment decisions.