US GDP growth has eased over the past two quarters, from 4.1% QoQ annualised in the final quarter of 2011, to just 1.5% in the three months to June. Of course, the US is by no means unique in this respect. With no resolution in sight to the Euro Area debt crisis, the global economy has entered a soft patch. Amid the dark clouds, last week’s Employment Situation report offered a small ray of light. Non-farm payrolls for July came in at +163k, after averaging just +73k during the second quarter. Financial markets reacted positively to the data, which were stronger than expected. Investors should perhaps take a step back and remind themselves that the US labour market remains extremely weak, and continues to be the dark cloud weighing down on a more robust recovery.

Scale and durability of joblessness is historically unprecedented

Housing crash has played a huge role

Possibility that the US labour market been permanently scarred?

Private sector employment offers some hope

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