US June Non-Farm payrolls rose (close to the expected level of 230,000) to 223,000. The unemployment rate fell to 5.3%.
With low inflation and no sign of wage growth, the Fed has even more breathing room (on it's timetable for raising interest rates) and certainly does not want to raise rates on an economy that is still not inflating to the degree it wishes.
If consumers don't spend, inventories build, manufacturers lower production and earnings fall. That is ultimately not good for equity prices.
Further, a study (released in April) by the LIS (Luxembourg Income Study Database) show that the American Middle Class is losing its status as the wealthiest middle class in the world.
Click on the chart to enlarge, but.... looks closely at the Canadian situation (top left)
That is the good news here: Canada is catching up!
Happy Canada Day!
Scott Tomenson,CIM Managing Partner, Chief Investment Strategist