【Preview】August's US employment statistics are scheduled to be released tomorrow night
The number of non-farm payrolls in August will be announced.isIt is scheduled to be announced on Friday night (6th) Japanese time at 09:30.In the market, the non-farm payrolls for August are expected to recover significantly from 0.114 million people in the previous month to 0.165 million people.The average employment growth over the past three months has slowed to just over 0.15 million people, the smallest increase since early 2021.The unemployment rate is expected to slightly decrease from 4.3% to 4.2%.The unemployment rate is expected to slightly decrease from 4.3% to 4.2%.Capital Group economist Jared Franz suggests that the 2% inflation target is lagged by rent.
Citigroup is more pessimistic than general expectations.The forecast predicts that the number of employees in August will be 0.12 million 5000, and the unemployment rate will remain at around 4.3% in July. It confirms that the weak July numbers are not due to temporary factors but reflect the actual weakening of labor demand, which will serve as an impetus for the FRB to cut interest rates by 50bp in September.
Anna Wong, an economist at Bloomberg, expressed optimistic expectations for August, saying, 'The number of non-farm payroll employees may improve from the disappointing numbers in July, but the early forecast for the reference period in March 2024 by the US Bureau of Labor Statistics was revised downward by 0.818 million people, which may have made FRB officials less inclined to believe the initial figure.'
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Will the number of non-farm payroll employees continue to be weak in August?
Citiexpects that new hiring will remain weak, just like in July.be predicted to be as weak as in July.
There is a downward risk to employment in the construction industry, government sector, manufacturing, and leisure hospitality. The total amount of residential construction has been decreasing throughout the year, contrary to the continuing increase in construction industry employment. Non-residential construction spending has also been stagnant for the past few months, and the direct spending stimulus from fiscal policies of the past few years has reached its peak. Therefore, it is expected that government sector employment will further decline over the next few months.
In addition, it is anticipated that there will be a significant decrease of 0.01 million 5000 jobs in the manufacturing industry, reflecting the typical decrease in automobile manufacturing employment during the summer holiday period in July, which may not fully recover even in August. With the sluggish demand for automobiles, there is a high possibility that production levels will decrease.
Finally, spending on discretionary services (such as restaurants) has been sluggish for most of this year, leading to further decline in leisure hospitality employment.
Furthermore,There is a fear that the unemployment rate will lead to the dovish policy of the FRB.Exists.
If the unemployment rate rises again to 4.4% or higher, and the number of new employees increases significantly, it seems quite likely that the FRB will implement a 50 basis point rate cut.
The unemployment rate has been rising every month since March, which is a typical precursor to an economic downturn. The unemployment rate for August is expected to remain at 4.3%, and while there is a possibility that it may decrease to 4.2%, the risk of the unemployment rate further rising is still being underestimated significantly amidst the rapid weakening of the labor market.
Even if the unemployment rate slightly decreases, one month of data may not be enough to convince Federal Reserve officials. However, if the unemployment rate returns to 4.2% or 4.1%, new job creation may become more important. If the number of employees in August falls below 0.125 million (5,000 people), there is a high possibility of accelerating interest rate cuts.
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US job vacancies at a 3-year low level
US Department of LaborThe Job Openings and Labor Turnover Survey (JOLTS) for July, announced on the 4th, showed a decrease of 230,000 job vacancies to 7.67 million.The deviation from the closing price of 2,371 yen on the 9th is about The lowest level in 3 yearsHowever, the slowdown in the labor market is orderly, and it is not considered a decline significant enough for the Federal Reserve (FRB) to consider a 0.5% point interest rate cut at this month's meeting.
Citigroup is more pessimistic than general expectations.The forecast predicts that the number of employees in August will be 0.12 million 5000, and the unemployment rate will remain at around 4.3% in July. It confirms that the weak July numbers are not due to temporary factors but reflect the actual weakening of labor demand, which will serve as an impetus for the FRB to cut interest rates by 50bp in September.
Anna Wong, an economist at Bloomberg, expressed optimistic expectations for August, saying, 'The number of non-farm payroll employees may improve from the disappointing numbers in July, but the early forecast for the reference period in March 2024 by the US Bureau of Labor Statistics was revised downward by 0.818 million people, which may have made FRB officials less inclined to believe the initial figure.'
Citiexpects that new hiring will remain weak, just like in July.be predicted to be as weak as in July.
There is a downward risk to employment in the construction industry, government sector, manufacturing, and leisure hospitality. The total amount of residential construction has been decreasing throughout the year, contrary to the continuing increase in construction industry employment. Non-residential construction spending has also been stagnant for the past few months, and the direct spending stimulus from fiscal policies of the past few years has reached its peak. Therefore, it is expected that government sector employment will further decline over the next few months.
In addition, it is anticipated that there will be a significant decrease of 0.01 million 5000 jobs in the manufacturing industry, reflecting the typical decrease in automobile manufacturing employment during the summer holiday period in July, which may not fully recover even in August. With the sluggish demand for automobiles, there is a high possibility that production levels will decrease.
Finally, spending on discretionary services (such as restaurants) has been sluggish for most of this year, leading to further decline in leisure hospitality employment.
Furthermore,There is a fear that the unemployment rate will lead to the dovish policy of the FRB.Exists.
If the unemployment rate rises again to 4.4% or higher, and the number of new employees increases significantly, it seems quite likely that the FRB will implement a 50 basis point rate cut.
The unemployment rate has been rising every month since March, which is a typical precursor to an economic downturn. The unemployment rate for August is expected to remain at 4.3%, and while there is a possibility that it may decrease to 4.2%, the risk of the unemployment rate further rising is still being underestimated significantly amidst the rapid weakening of the labor market.
Even if the unemployment rate slightly decreases, one month of data may not be enough to convince Federal Reserve officials. However, if the unemployment rate returns to 4.2% or 4.1%, new job creation may become more important. If the number of employees in August falls below 0.125 million (5,000 people), there is a high possibility of accelerating interest rate cuts.
US Department of LaborThe Job Openings and Labor Turnover Survey (JOLTS) for July, announced on the 4th, showed a decrease of 230,000 job vacancies to 7.67 million.The deviation from the closing price of 2,371 yen on the 9th is about The lowest level in 3 yearsHowever, the slowdown in the labor market is orderly, and it is not considered a decline significant enough for the Federal Reserve (FRB) to consider a 0.5% point interest rate cut at this month's meeting.
The decrease in job openings is consistent with recent data indicating a softening labor market. This data has raised concerns among Federal Reserve officials. The slowdown in job growth, rising unemployment rates, and the difficulty for job seekers to find employment is the current situation.Fanning concerns about a recession (economic downturn)are doing.
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FRB Chairman considers a rate cut
Federal Reserve Chairman Powell mentioned in his speech at the Jackson Hole meeting on August 23 (the annual symposium hosted by the Kansas City Fed), "My confidence that the inflation rate is consistently heading towards the 2% price target has deepened," and stated, "It's time to adjust monetary policy," indicating the intention to cut interest rates at the next meeting.He also indicated the intention to cut interest rates at the next meetingThe US economy further recovered, and the GDP growth rate reached 3.85% in 2004.
Furthermore, Chairman Powell stated that the current state of the labor market, including a shortage of labor which has been a factor in inflation, has "considerably cooled down from the previous overheated state," and added, "We neither seek nor desire further cooling or slowing down of the labor market. While the risk of inflation reaccelerating has decreased, the risk of deteriorating employment has increased."Concerns about an economic slowdownIt rained.
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Expectations of interest rate cuts.
According to CME Group's FedWatch tool, the market...The market is estimating that the Federal Reserve (FRB) is likely to implement a 25bp rate cut in September, approximately 31% probability.However, given that the rate cuts by the FRB this year are already priced in, and there are only three more meetings remaining this year, there is a possibility that the FRB will make a significant 50bp rate cut in one of those remaining meetings.
Federal Reserve Chairman Powell mentioned in his speech at the Jackson Hole meeting on August 23 (the annual symposium hosted by the Kansas City Fed), "My confidence that the inflation rate is consistently heading towards the 2% price target has deepened," and stated, "It's time to adjust monetary policy," indicating the intention to cut interest rates at the next meeting.He also indicated the intention to cut interest rates at the next meetingThe US economy further recovered, and the GDP growth rate reached 3.85% in 2004.
Furthermore, Chairman Powell stated that the current state of the labor market, including a shortage of labor which has been a factor in inflation, has "considerably cooled down from the previous overheated state," and added, "We neither seek nor desire further cooling or slowing down of the labor market. While the risk of inflation reaccelerating has decreased, the risk of deteriorating employment has increased."Concerns about an economic slowdownIt rained.
According to CME Group's FedWatch tool, the market...The market is estimating that the Federal Reserve (FRB) is likely to implement a 25bp rate cut in September, approximately 31% probability.However, given that the rate cuts by the FRB this year are already priced in, and there are only three more meetings remaining this year, there is a possibility that the FRB will make a significant 50bp rate cut in one of those remaining meetings.
Ben Ayers, Senior Analyst at Nationwide Life Insurance, stated in a Friday report that "Following Chairman Powell's speech at Jackson Hole, a rate cut by the FRB in September is already on the table, but if inflation cools further, particularly if the labor market deteriorates more than expected, the FRB may make a significant rate cut at the next rate cut meeting."
"In the three remaining FOMC meetings to be held in 2024, we continue to expect more cautious rate cuts (25bps), but if the economic conditions worsen more than expected, the door to a more significant rate cut will likely be opened," stated Ayers.
- moomoo News Evelyn
Source: Bloomberg, Reuters, Nikkei, CME FedWatch, moomoo
This article uses auto-translation partially.
- moomoo News Evelyn
Source: Bloomberg, Reuters, Nikkei, CME FedWatch, moomoo
This article uses auto-translation partially.
Disclaimer: Moomoo Technologies Inc. is providing this content for information and educational use only.
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