US unemployment has declined to 4.9% in January, according to the latest figures from the US Department of Labor Statistics, dipping below the 5% level seen at the end of 2015. The figure ought to mean that all is well with the world’s largest economy since the figure is well below the long-term average figure of 5.82% (between 1948 and 2016 – although no single methodology for calculating the figure can be used since the goalposts move from time to time). In any event, unemployment is well below the high-water mark of 10.8% seen in 1982 and the peak of the Global Financial Crisis where it flirted with the 10% level in late 2009. Currently, approximately 7.8 million Americans are regarded as being unemployed.

The current unemployment situation in the US ought to be a fillip to investment, but the news that “only” 151000 jobs were created last month sent markets in the US and further afield lower. Arguably, the US has attained “full employment” – it doesn’t mean that anybody who wants a job has one, but rather that the economy is in balance, free from cyclical economic weakness and inflationary pressure. If that is true, job creation will be more modest, just reflecting the changing population dynamics of the USA rather than being in a “recovery phase”. It should mean that there will be wage growth as employers need to entice better workers and that more people can find full time working hours than is currently the case.

However, in this current mood of investor pessimism, the relatively week (in recent terms) job data has been enough to spur further selling, sending indexes around the world tumbling. The latest “crisis” has again seen the Yen appreciating against other major currencies as investors seek a perceived safe haven. It has now fallen below the levels seen against other majors before the Bank of Japan announced its negative interest rate policy. If current trends are respected, a stock market bounce will send the Yen lower.