- Scott Brown, chief economist at Raymond James & Associates Inc.
After the release of the disappointing statistics from the world's largest economy, the single currency managed to gain only 0.02%, with EUR/USD hitting 1.3629, as looming ECB meeting pushed the single currency lower.
The winter is over, however, the economy still cannot rebound from first quarter's slump. American companies added only 179,000 workers in May, posting the smallest monthly gain in four months and following a 215,000 gain a month earlier, the ADP Research Institute unveiled on Wednesday. Analysts were expecting a reading of 210,000. What is more important, is that the indicator has fallen below the 12-month average of 195,200. One of the reasons for weak hiring is that some companies are confident they will be able to cope with the demand without adding more workers, after the economy posted first contraction in three years in the first quarter. A pickup in growth will propel bigger wage gains and will leave consumer with more free cash to spend.
Another worrying sign is a trade deficit at a two-year high in April. The Department of Commerce said exports fell 0.2%, while imports climbed 1.2% resulting in a trade gap of $47.2 billion in the fourth month of 2014. That was the largest shortfall in two years, as Americans bought record amounts of consumer goods, automobiles and business equipment from abroad.
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