US Unemployment Rate

August’s employment report, which was weaker than markets were expecting but stronger than our call, cements our view that the easing cycle will begin during the next Federal Open Market Committee Meeting (FOMC), which takes place September 17-18. We know that markets are still pricing in a 50 basis points reduction in the federal funds rate, but we make the case for a 25 basis point reduction below. But going back to the employment numbers, we believe that markets were being overly optimistic in expecting jobs in August to have ...

The US labour market is clearly cooler, but most indicators still show an economy operating at trend or higher. It makes sense for the Fed to start removing policy restraint, but we see little need to panic. Even if we saw some improvement in the employment report for August, the payback after the weak July data was smaller than we expected. Looking at the overall picture for the US economy, we do however still see the Fed reducing interest rates by 25bps in two weeks as the most likely outcome despite the market leaning heavily ...

The jobs report provides a real mix of numbers that does little to resolve the debate over whether the Fed will cut rates by 25bp or 50bp on 18 September. We have a 50bp in our forecast, but it is a low conviction call made on the basis that inflation fears have receded and the Fed will want to get ahead of labour market weakness, which we think will become increasingly apparent in the months ahead. In terms of the August numbers, headline non-farm payrolls rose 142k versus the 165k consensus, so a slight downside miss, but there ...

The US economy appears to be on a knife’s edge, and Friday’s jobs report will be the deciding factor as to the next direction. The August jobs report is expected to provide some much-needed clarity as to whether the labor market is slowing gracefully or spiraling quickly as was indicated by the recent weeks’ bleak batch of employment data. “The next set of job numbers released this week will be among the most consequential in a while,” Tuan Nguyen, US economist at RSM US, wrote in commentary issued Wednesday. Economists are expecting ...

Wall Street is gearing up for one of the most important economic releases of the year Friday, when the Labor Department puts out a jobs report expected to go a long way in determining the future of Federal Reserve policy. The Wall Street consensus is for nonfarm payrolls growth of 161,000 for August and a slight decline in the unemployment rate to 4.2%, according to Dow Jones. However, recent data, including a massive downward revision to previous counts, has pointed to a sharp slowdown in hiring and has put some downside risk to ...

The Federal Reserve is expected to shift gears this month on monetary policy and enact the first rate cut since the central bank started its inflation-fighting tightening cycle 30 months ago. Although key inflation readings, including the closely watched Consumer Price Index, are due out a week before that crucial decision, the size of the rate cut likely will be determined this Friday. The US economy is at an inflection point, and Friday’s jobs report, which the Bureau of Labor Statistics is set to release at 8:30 am ET, could very ...

With the Federal Reserve set to begin cutting interest rates in a few weeks, the main question now is how big the first reduction will be. Monthly US employment data due Friday will probably determine the answer. Investors are on the edge of their seats after the release of the July jobs report last month showed a rise in the unemployment rate to a level that triggered a popular recession indicator, fanning fears in financial markets that the economy may be on the brink of a downturn. Stocks have since rebounded, and forecasters ...