The latest figures for December have shown that US payrolls only increased by 70,000, compared with an increase over 200,000 in November. This was well below forecasts for a 200,000 increase in payrolls in December.
It's a blow for the US economy and contradicts a string of other more positive data including housing, manufacturing and consumer spending figures which have all showed improvement recently. The payroll data also brings into question the speed of the so-called 'taper' by the US Federal Reserve, which creates uncertainty for investors not only as to the true state of the US economy but also how the US Fed will respond.
Many Australian investors have been purchasing stocks with US exposure to benefit from a US economic recovery. Stocks such as James Hardie Industries plc (ASX: JHX), which is well positioned to benefit from a housing recovery and Brambles Limited (ASX: BXB), which will benefit from an improvement in manufacturing and consumer spending have been popular amongst investors.
However guessing the speed and strength of the US recovery is a game most investors are best off avoiding. Rather, owing high-quality global businesses that can continue to grow even if the US economy remains weak for some time, but which still provide exposure to the US, is a reasonable course of action for many investors.
Stocks such as Brambles, as well as health sector businesses like CSL Limited (ASX: CSL) and Sonic Healthcare Limited (ASX: SHL), could be smart ways to position a portfolio with a lower level of risk but still upside exposure to a US recovery.
Foolish takeaway
Warren Buffett often says that he doesn't waste too much time worrying about macroeconomic issues, rather he focuses on identifying quality businesses that in the long-run will produce meaningfully higher earnings. It's a smart way to operate and has proven to be a very successful strategy.
