U.S. Review
Farewell to Winter Weather Woes
· Nonfarm payrolls bid adieu to the sluggish pace of employment growth during the winter months. Payrolls surged by 288,000 jobs in April with upward revisions to February and March and the unemployment fell to 6.3 percent. The drop in the unemployment rate, however, was due to a significant decline in the labor force.
· ISM manufacturing also improved in April and now sits at 54.9 with new orders unchanged on the month. The biggest comeback was in production, which slipped into contraction territory in February, but has since rebounded in March and April.
Global Review
Will the ECB Ease Policy Further at Next Week’s Meeting?
· Recent indicators suggest that economic activity in the Eurozone continues to expand, albeit at a rather modest pace. Everything else equal, the ECB would not be inclined to ease further if economic activity is accelerating.
· On the other hand, inflation is very low and credit growth is benign, raising the probability that the ECB acts further. Although we believe that the Governing Council will keep policy unchanged next week, the ECB will remain “biased” to ease for the foreseeable future.
Read the full report: Economic Research
Wells Fargo