(5 October 2015)  Friday’s disappointing US jobs report is the Fed’s worst nightmare.  Despite six years of near-zero interest rates and $4 Trillion worth of QE-style money printing, the US economy only added 142,000 new jobs in September, a number well below expectations and the key 200K level.  The US economy therefore remains very fragile and could tip into recession if global economic headwinds get worse.  The conundrum for the Federal Reserve is that it could be trapped at zero percent here with little room to maneuver in the event of another major economic slowdown.  The Fed had been promising for many months to raise rates back towards normal levels as the economy strengthened in late 2015.  Now that seems increasingly unlikely as the Fed may well be forming contingency plans for perhaps another round of quantitative easing (QE4) or even the dreaded nuclear option of negative interest rates.

But is the US economy really headed for another recession?  The horoscope of the US may offer some insights on this question.  To be sure, it is very difficult to extrapolate economic activity based on planetary transits alone.  Numerous other factors have to be considered and even then, we may only get an impressionistic picture.  But there is some evidence to suggest that whenever malefics Saturn and Ketu (South Lunar Node) are prominent in the USA chart, collective pessimism and economic contraction becomes more likely.  Specific afflictions to the Sun, Moon and 2nd house (= wealth, economy) may also indicate a slowdown of business activity and rising unemployment.  The matter is not a ‘yes-no’ proposition but more along the lines of a ‘more likely-less likely’ continuum.  The greater the number of these factors that are present in the chart, the more likely a recession becomes.

By way of example, the Great Recession of 2008-2009 occurred when transiting Saturn opposed the Moon for over a year including a near-exact direct station in June 2008 when the US job losses began to accelerate.   The Moon represents the population as a whole as well symbolizing the emotional state of the nation.  An extended transit by Saturn to the Moon is usually bad on a variety of levels, including the economy.   The 2nd house of wealth was doubly afflicted during this recession since the 2nd house ruler Saturn was aspected by Rahu in the second half of 2008.   Rahu then continued along its retrograde path to conjoin natal Ketu in the 2nd house (=wealth, economy) late in 2008. 

Currently, we can see that transiting Saturn is squaring the Moon so that might have accounted for the disappointing jobs report last week.  Saturn’s forward square aspect is not a full strength aspect and it is moving more quickly now so it may not have a lasting impact.  Transiting Ketu’s aspect to Mercury, the planet of commerce, may be another source of economic weakness at the present time.  But neither of these influences will last too long so I would think the chances of a further US slowdown in late 2015 are quite small. 

However, 2016 has a couple of potential trouble spots.  In March, transiting Saturn will station retrograde at 22 Scorpio while under the 3rd house aspect of natal Saturn.  This looks like it could reflect negatively on the economy, even if it may not herald a full-blown recession.  Interestingly, Saturn will square Jupiter at that time when both planets station in March and April.  This one way Saturn-to-Jupiter aspect should be seen as a negative indicator for economic sentiment, not just in the US but for the world generally.  As an added burden, we can see that the ongoing Uranus-Pluto square will line up against the natal Saturn at 24 Virgo in hard aspect.  This is likely to further weaken economic activity and increases the possibility of sudden (Uranus) and intense (Pluto) economic problems. 

The second half of 2016 looks perhaps even more challenging as transiting Saturn stations direct at 15 Scorpio and thus falls under the exact aspect of natal Rahu.  In this instance, Saturn, as 2nd house ruler, represents the economy and its extended affliction by Rahu is a strong indication of economic difficulties worsening in July 2016.  In addition, transiting Ketu will aspect the natal Sun-Jupiter-Venus conjunction throughout the second half of 2016.  While this is not conclusive evidence of a US recession in 2016 but it definitely increases the probability of a significant slowdown and possible recession. 

Weekly Financial Forecast

Stock markets generally rose last week as the jobs report meant the Fed was more likely to keep its zero interest rate policy in place a while longer.  In New York, the Dow gained about 1% closing at 16,472 while India’s Sensex added more than 1% to 26,220 following a surprise 50 basis point rate cut by the RBI.  In last week’s market forecast I had been fairly equivocal about last week although I did expect some gains into midweek at least as Venus entered sidereal Leo. 

Stocks were strong today (Oct 5th) as the Sun aligned with the favourable Jupiter-Pluto aspect.  This could produce some more upside perhaps going into midweek but there are three potential obstacles.  The Mars-Neptune opposition will tighten Tuesday and Wednesday.  This is usually a bearish influence although it may be partially muted by the Jupiter-Pluto aspect.  The late week may be disrupted by the Mercury conjunction with Rahu (North Lunar Node) on Thursday and Friday.  Moreover, Mercury is stationing direct on Friday and hence the conjunction may be that much more powerful. 

Also, there is a degreewise alignment with Saturn here to contend with.  Friday also features a close Venus-Saturn square.  In actuality, Venus, Mercury and Rahu are all aligning with Saturn in the late week.  This is a unusually large alignment of planets which may correspond with a significant market development.  Saturn’s presence is generally negative although its effects sometimes manifest only after the alignment begins to separate (i.e. next week).  It should be an interesting week.