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2 Oct 2015
US unemployment stable but uniformly dreadful NFP results - ING
FXStreet (Delhi) – Rob Carnell, Research Analyst at ING, suggests that a uniformly dreadful September US labour report effectively buries any hopes for an October rate hike from the Fed, with the headline payrolls rising by only 142K, and the August data being revised lower (not higher as has been in every August release since 1999) to 136K from an initial 173K.
Key Quotes
“Private payrolls too were exceptionally weak, at only 118K, and at strong odds to the ADP survey which came in at +200k. The public hiring is good news given the private backdrop, and mainly in local government and education. We wonder if it might slow down in a month or so, now that the new school year is fully underway. If so, and if we don’t see the private figures firming, we may need to scale back our expectations for payrolls in coming months.”
“The other disappointment in the data was from hourly wages growth, which only needed to show a 0.2%mom increase to take its annualized growth rate into new territory. But instead, is was unchanged, and the annual rate remains stuck at 2.2%YoY. Not enough to get the Fed doves vote for a hike, at least not yet.”
“The only vague solace in these figures came from the unemployment rate, which remained 5.1% as the labour force dropped a worrying 350K, and the total level of employment fell 236K, whilst unemployment also fell 114K. In the end, this was only 0.002ppt too high to prevent a further drop to 5.0%, which it may do next month. Even hours worked declined.”
“For once, these labour market numbers gave an unambiguous result. The problem is that it was unambiguously negative. No rate hike this month then it seems. But it raises doubts too about the probability of a December hike, unless the Fed changes the basis upon which it decided policy rates.”
Key Quotes
“Private payrolls too were exceptionally weak, at only 118K, and at strong odds to the ADP survey which came in at +200k. The public hiring is good news given the private backdrop, and mainly in local government and education. We wonder if it might slow down in a month or so, now that the new school year is fully underway. If so, and if we don’t see the private figures firming, we may need to scale back our expectations for payrolls in coming months.”
“The other disappointment in the data was from hourly wages growth, which only needed to show a 0.2%mom increase to take its annualized growth rate into new territory. But instead, is was unchanged, and the annual rate remains stuck at 2.2%YoY. Not enough to get the Fed doves vote for a hike, at least not yet.”
“The only vague solace in these figures came from the unemployment rate, which remained 5.1% as the labour force dropped a worrying 350K, and the total level of employment fell 236K, whilst unemployment also fell 114K. In the end, this was only 0.002ppt too high to prevent a further drop to 5.0%, which it may do next month. Even hours worked declined.”
“For once, these labour market numbers gave an unambiguous result. The problem is that it was unambiguously negative. No rate hike this month then it seems. But it raises doubts too about the probability of a December hike, unless the Fed changes the basis upon which it decided policy rates.”