The latest monthly US jobs data is set to be released at 10.30pm AEST. Here are some expectations:: “The Fed is clearly focused mostly on inflation right now. Still, another solid employment gain, especially if it is coupled with a big wage hike and/or another decline in the unemployment rate, would further underscore that the FOMC has its work cut out for it to slow the economy by enough to get inflation back to 2 per cent.
“The markets are unlikely to settle the debate over 50 BPs vs. 75 BPs in September until the August CPI is released on September 13, but a strong employment report would likely skew the odds toward the larger move .”: “Our base-case forecast for today’s August payroll number is a solid 400K, above the consensus, 300K, but a slowdown from the 528K increase in July.
“At 370k, the pace of payrolls in August would fall below the monthly average year to date. Monthly job creation averaged 637k in 21Q4, 539k in 22Q1 and 384k in 22Q2.”: “We expect nonfarm payrolls increased by 350k in August with an uptick in participation, keeping the unemployment rate at 3.5 per cent. We expect average hourly earnings rose 0.2 per centM, lowering the year-over-year rate to 5.1 per cent.
“But the market does still expect rate cuts in 2023, and if the economic data and Fed speak remove that possibility, then we will see additional weakness in markets as investors price in 1) Higher rates for longer and 2) The increased chances of an economic slowdown.”
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Source: FinancialReview - 🏆 2. / 90 Read more »