Decline in US private sector employment in June confirms fears of stagflation

U.S. private payrolls came down by 33,000 in June, according to ADP National Employment Report. The  expectation was that private sector would add 99,000 jobs in the month. This indicates to the high level of uncertainty that private businesses and companies are currently facing in USA. Much of this uncertainty has been caused by the higher import tariffs that the US President has proposed and imposed. The tariffs are expected to increase inflation and push the US economy into a stagflation like state.  In stagflation an economy suffers high unemployment rate due to economic slowdown and high inflation rate at the same time.

Private sector jobs added in May was also revised downwards to 29,000 jobs from the initial estimate of 37,000.

U.S. Crude Oil Inventory rises by 3.8 million barrels last week

Meanwhile, US Energy Information Administration reported an unexpected increase in U.S. crude oil inventory in the week ended June 27th. US crude oil inventory increased by 3.8 million barrels last week after declining by 5.8 million barrels in the previous week.  At 419 million barrels, U.S. crude oil inventory remains about 9 percent below the five-year average for this time of year, EIA said.

Eurozone Jobless Rate Rises to 6.3%

The euro area unemployment rate increased slightly in May, Eurostat reported on Wednesday. Unemployment rate in May stood at 6.3%. This was above the 6.2% rate reported in April. Data showed that 10.830 million people in the euro area were unemployed in May. Compared to April, the increase in number of people unemployed was 54,000. The numbers show that European Central Bank should continue to focus more on giving a boost to GDP growth and employment.

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Source: EIA; Eurostat, ADP National Employment Report