The reports covering the state of Employment in the United States for the month of September 2013 are set to be issued on Tuesday 8 October 2013, giving economists and policy makers a clearer picture on the condition of the nation?s economic standing. The list of reports include the Change in Non-Farm Payrolls, the Unemployment Rate, and the Underemployment Rate.
While many experts believe at this time that there will likely be a rise in the number of jobs added during the past month, it may not be enough to significantly shift the figures for the overall unemployment rate. Currently, no statistical forecasts have been made concerning the numbers for the Underemployment rate, although analysts believe that it is likely to remain high.
Analysts note that while the general employment situation in the US has continued to improve in recent months due to a strengthening recovery in the private sector backed by an intensive effort on the part of the Federal Reserve, the recent crisis over the debt ceiling and the shutdown of the government may prove to depress the economy as investors and business await a resolution. In the meantime with the credit rating of the US in the balance, analysts believe that both the USD?s value in trading as well as the figures for employment may suffer from the inability of the Democrats and Republicans to reach the conclusion of the standoff.
Investors Flee USD in Search of Haven Assets
According to reports from 7 October 2013, commodities such as gold and silver have benefitted from the ongoing crisis in Washington over the continued funding of the US government, enjoying a spike in bullish trading that has not been seen since July.
In addition to these precious metals, assets such as the Yen have also enjoyed a boost from the failure of the Republicans and Democrats to pass measures that would allow the US to continue borrowing money, thereby raising the debt ceiling and not defaulting on its debt to buyers of US securities.
The crisis over the funding of the government stems from continued efforts by the Republicans to defund or delay the Affordable Care Act, also known as Obamacare, from coming into effect. This program is geared at changing the current healthcare system in the US in that it would provide a wider range of coverage to more Americans by requiring insurance companies to accept many customers who may have been previously ineligible due to prior health problems or other factors. It is also aimed at lowering costs across the board, making it more accessible for many of those from the lower income brackets. Much of the controversy that the Republicans have laid out over the program is that it includes a healthcare mandate that would require people who may not have previously been insurance holders to buy care in order to help offset the costs of insurance companies including higher risk clients under their care. In an effort to force President Barack Obama to negotiate or defund his health plan, the Republicans are refusing to approve the current budget that would allow the US Federal government to continue functioning. As a result, many parts of the government have been forced to shutdown as they no longer have budgets to operate on. This shutdown along with the failure of the two sides to reach a resolution has lead to increased concerns amongst investors in the USD, many of whom had just recently returned to the dollar following their exits from the emerging markets last month. As US securities become riskier assets, demand for them may begin to drop, further hurting the economy.
Analysts believe that investors may see a continued drop in the dollar which has already fallen more than any other of its rival currencies should the two sides prolong the crisis. Conversely, haven assets will likely rise, providing traders with alternative investments until the situation is resolved.
WTI Drops Following Hurricane Karen
It was reported on Monday 7 October 2013 that the West Texas Intermediate has faced falling numbers despite the return of workers to the Gulf of Mexico pumping stations. According to reports, nearly 62% of crude output from the Gulf was halted due to the recent storm, Hurricane Karen which passed through the region at the start of the month.
Due to the effects of the storm, analysts believe that it may take some time for the Gulf operation to return to their previous levels of output, perhaps affecting supply which has faced lower numbers in recent months, adding volatility to the market.
Analysts note that some experts have also pointed to concerns over the debt limit debate that is ongoing in Washington as the Democrats and Republicans continue to fail in their efforts to reach a resolution over the funding of the US government for the coming term as playing a role in the decline of the WTI.