US Economy Showing Signs of Recovery
On the other side of the Atlantic, U.S companies, in February, cut the fewest amount of jobs in the past two years. Yesterday’s ADP Non-Farm Employment Change reported decline of 20,000, slightly higher than analysts’ prediction of -15,000, follows a revised 60,000 drop in the prior month. The results of the ADP show that companies are still hesitant to add workers until they see sustained gains in sales as the U.S emerges from the worst recession since the 1930’s. This ADP report is generally considered a predictive index for Friday’s highly awaited Change in Non-Farm Employment Change. After a slight improvement in January, the number of employed Americans is expected to fall by another 40,000.
The U.S economy continued to show signs of recovery yesterday as the, ISM non-manufacturing index rose to its highest reading since December 2007. The index increased to 53 in February from 50.5 in January – a sign that the pickup in the manufacturing is trickling down into the rest the rest of the economy.
Later today, the National Association of Realtors will announce the monthly Pending Homes Sales. The number of contracts to buy previously owned U.S. homes is predicted to have risen a mere 1.4% in January, showing the extension of a tax credit is producing a limited effect on the housing market. The renewal of a government incentive to first-time buyers, originally due to expire at the end of November, and its expansion to include current owners has yet to lure buyers back into the market after helping boost sales in 2009. A lack of jobs and mounting foreclosures have depressed confidence, indicating housing will take time to rebound.
The US Dollar closed down against major currency counterparts in the forex online market, particularly commodity base currencies. The CAD advanced for a fourth consecutive day against the greenback, gaining a total of 0.438% over the course yesterday, as higher crude jumped to $80.66/barrel and gold touched its highest level since January 15th. Later today, Canada will release its Ivey PMI- generally considered a leading indicator of economic health.
The week will cap off tomorrow with the release of the U.S unemployment rate – expected to increase to 9.8%, from its current level of 9.7%.
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