Nankai Group US Job Growth Brakes Sharply

Nankai Group says hopes that poor US economic data will not turn around in the 2nd quarter.

Nankai Group: As more evidence emerges that the US employment recovery is beginning to lose momentum, Nankai Group has told investors that they should ignore suggestions that the cold winter weather has had anything more than a minor impact upon job creation.

“The prevailing narrative is that the pace of the jobs recovery will improve once the effects of the cold weather that affected large swathes of North America have worked through but that’s wishful thinking”, said an “Nankai Group” analyst. “America isn’t the only country that has cold winters but commentators and economists are all very quick to blame disappointing data on them,” added the analyst.

The prevailing narrative is that the pace of the jobs recovery will improve once the effects of the cold weather that affected large swathes of North America have worked through but that's wishful thinking.

Nankai Group, Analyst

Nonfarm payroll data published earlier this month showed that the US economy created just 126,000 jobs in March compared with forecasts for 245,000. Data published last week showed initial weekly jobless claims - a measure of first time applications for unemployment benefits – jumped to 294,000 against consensus forecasts for an increase of 280,000.

The US unemployment rate has fallen steadily in the years since the deep recession from a high of 10.2% to the current 5.5% but concerns about the quality of the jobs created have been rising with many suggesting that part-time, service and hospitality sector jobs don’t pay well enough to enable workers to buy real estate and participate meaningfully in the consumption that generates as much as 70% of US GDP. Nankai Group says it is advising clients to take risk off the table by taking profits on stocks that have performed well.

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