Ladies and Gentlemen
Today at 13.30 BST we get the latest employment report from the United States, it will assist government policy makers in their quest to decide on the timing of the first rate rise since 2006.
The change in Non-Farm payrolls is expected to be 217k according to the Bloomberg Survey, the report is seen as the deciding factor for the September FOMC. Commentators believe the chances of ‘lift off’ have diminished in the light of the financial turmoil, however the employment survey was concluded before this period.
The August number is heavily influenced by seasonal factors and difficult to predict. Over the last 10 years the difference between the consensus and the actually number has been biggest in both March and August, there was a 119k miss in March of this year let’s hope we are closer for August.
It is important to remember the dual mandate of the Fed, meaning that both employment and inflation will have to be at levels where tightening monetary policy is appropriate.
The unemployment rate which has already reached the top end of the Fed’s year end projection 5.2%, is a 7 year low. However, a falling oil price means away from the workforce there is a disinflationary environment and may enable the key decision to be delayed.
At Atom8 we are cognisant that this is an important number and that it is worthwhile looking at all the data that is released at 13.30 including the July revisions.
Good Luck
