U.S Job Data, interest rate decision extended

Mixed U.S job data slows down September interest rate hike predictions


Analysts have been forced to review their predictions for a September increase in U.S Interest rates after an unexpected slowdown in the U.S job reports.


On Thursday, the Labor Department announced that nonfarm payrolls increased by 223,000 last month while construction and government employment remained the same. With the nonfarm payrolls experiencing a downwardly revised trend for the last couple of months, it meant that 60,000 lesser jobs were created.


Even if the unemployment rate decreased to 5.3%, the lowest since April 2008, it was still a weak point for the labor force lost 432,000 people. With the targeted range lying between 5.0% and 5.2% for the unemployment rate, the actual data has been marked as consistent with full employment by several analysts.


Ted Wieseman, economist at Morgan Stanley, believes that “this report certainly isn’t pushing the Fed to accelerate the liftoff timeline”. Indeed, the predictions on a December increase for U.S interest rates had a more than 50% chance of occurring. However, the momentum on these bets has shifted to early 2016 following the release of the report while some economists still believe that the Federal Bureau will toughen its monetary policy in 2015 itself.


On the other hand, U.S Treasury debt finished higher while the dollar lost little ground against some currencies. As for U.S Stocks, nothing much changed among increasing worries over Greece’s debt crisis.


Warren Tancredi By: Warren Tancredi