Escalating trade tensions between the world’s two strongest economy’s – the US and China, pushed US stocks to a fresh one-month low today (Friday).
New York’s Indices were pushed further lower on the release of tepid jobs growth revealed in today’s highly anticipated non-farm payrolls data.
Global stock exchanges fell sharply following President Donald Trump’s threat to impose a new tariff worth $300bn of Chinese exports into the US. Fueling the trade war fire, Trump said the US would place 10% tariffs on $300 billion worth of Chinese goods. Currently, the US already apply a 25% tariff on Chinese goods exported into the US worth $250 billion.
President Trump said, in a series of tweets, that the proposed new tariffs were in response to alleged Chinese non-compliance with the existing trade arrangements.
China responded on Friday by saying that it would not be blackmailed and warned of retaliation, should the tariffs be imposed.
Tepid US Nonfarm Payrolls Data
Official data from the US Labor Department today showed that the US economy created fewer last month. Meanwhile, the unemployment rate remained unchanged at 3.7% in line with market expectations.
Nonfarm payrolls increased by 164,000 in July, also in line with analysts’ expectations. Revisions were downbeat though. The initial estimate for payroll gains in June was revised downward 31,000 to 193,000, whilst May’s estimate was revised downward 10,000 to 62,000.
The increase in July was roughly the same as the average monthly gain for payrolls throughout the first half of this year. Nonfarm Payrolls rose by an average of 223,000 a month throughout 2018.
Average hourly earnings for employees on private, nonfarm payrolls rose 8 cents to $27.98. On a yearly basis, the average hourly earnings have increased by 3.2 percent. Market analysts’ had predicted there to be no change in the average hourly earnings to Junes 3.1% increase.
US Stocks Lower
At the time of writing, the S&P 500 is down 1.13%, the NASDAQ is 1.88% lower and the Dow 30 0.96% lower.