The Jobs Report Is Expected To Be Tepid And That Could Lead To An Aggressive Fed

Spencer Platt | Getty Images August job growth likely slowed from July’s frenetic pace, but is still expected to be quite strong, with broad-based hiring across many sectors. Monthly jobs data is always important, but the August report, released at 8:30 a.m. ET Friday, is especially important as the state of the labor market will be a major factor in the Federal Reserve’s next interest rate decision later this month. The economy is expected to have added 318,000 jobs in August, down from a surprisingly strong 528,000 jobs added in July, according to Dow Jones. The unemployment rate is expected to remain steady at 3.5%, while average hourly wages are expected to increase by 0.4% or 5.3% year-over-year. “The view among market participants is that the employment report is more important than the CPI inflation report in determining whether a 75 basis point increase or more in September is more appropriate than a 50 basis point increase and I think that is the correct view “, he said. Michael Gapen, chief US economist at Bank of America. The other important data central bank officials will consider as they meet on September 20 and 21 is the August consumer price index, released on September 13. The CPI is expected to be up but down from July’s 8.5% pace due to falling gasoline prices. Stocks sold off ahead of this week’s nonfarm payrolls report on concerns about inflation and rising interest rates. Strategists say the jobs report could be seen as a “bad news is good news” report. A strong number could prompt more selling and a rise in bond yields as investors assume it will make the Fed more aggressive in raising interest rates. “A weak number will lead to a bond rally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “It will lead to a weaker dollar and that will give us a relief rally in stocks, but I don’t know how long it will last because buying stocks in the teeth of a recession was not a great strategy. I think it will be a recession for some and maybe not for others.” Fed Chairman Jerome Powell spooked the market last week when he stressed that the Fed is committed to fighting inflation with higher interest rates and has no plans to back down. Many market professionals expected the Fed to reverse some of its rate hikes next year. Powell used his Jackson Hole speech to bluntly warn that the economy and labor market will likely feel “pain” as the Fed uses rate hikes to get inflation under control. Investors have been debating whether the Fed will use its September meeting to trigger a third hike of three-quarters of a point or retreat to half a percentage point. On Wednesday, Cleveland Fed President Loretta Mester, a member of the Fed’s policy-making committee, said the central bank should move its key lending rate above 4 percent by early 2023 and keep it there. .

Focus of the Fed

“The state of the labor market has been the Fed’s focus,” said Diane Swonk, chief economist at KPMG. “It’s one thing to say unemployment is unsustainably low, and another thing to say we’re going to increase unemployment. They mean the same thing…Labor market pain increases unemployment.” Swonk said there is a lot of focus on the August jobs report, but it is the one month economists expect the government’s monthly payrolls data to be misleading. “August tends to have the lowest response rate for the payroll survey of any month of the year, which makes it subject to some of the biggest revisions,” he said. “That number is likely to be revised a lot. It’s a number you have to take with a grain of salt.” Swonk said small business hiring was likely more affected by inflation and higher rates than larger employers. He expects there could be some degree of labor “hoarding” as companies keep workers rather than lay them off because of the difficulties in finding workers. Leisure and hospitality, for example, may not see the usual end of the summer slump because businesses were already short-staffed during the summer holiday season, he added.

Negative early next year

Both Swonk and Gapen expect the labor market to start turning out negative monthly numbers early next year as Fed tightening weighs on the labor market. However, the labor market remains surprisingly resilient so far. The Bureau of Labor Statistics this week reported a surprising 11.2 million jobs in July, a million more than expected. Tom Gimbel, founder of LaSalle Networks, a recruiting firm, said he doesn’t really see a slowdown despite high-profile tech layoff announcements. “We’re seeing a big uptick in technology…It’s continuing to grow. The biggest numbers tend to be in cyber security. I’m seeing a 20% year-over-year increase in jobs,” he said. “I see a 15% increase in project management. Companies are still doing special projects in the technology space.” He said sales jobs were also up 10 percent from last year. “We just heard the message from Jackson Hole again, the Fed is serious and we’re going to get inflation under control. The labor market is clearly out of balance,” Gapen said. “The stronger it is across the board, the more Fed tightening it will bring.”

title: “The Jobs Report Is Expected To Be Tepid And That Could Lead To An Aggressive Fed Klmat” ShowToc: true date: “2022-11-14” author: “Philip Burns”

Spencer Platt | Getty Images August job growth likely slowed from July’s frenetic pace, but is still expected to be quite strong, with broad-based hiring across many sectors. Monthly jobs data is always important, but the August report, released at 8:30 a.m. ET Friday, is especially important as the state of the labor market will be a major factor in the Federal Reserve’s next interest rate decision later this month. The economy is expected to have added 318,000 jobs in August, down from a surprisingly strong 528,000 jobs added in July, according to Dow Jones. The unemployment rate is expected to remain steady at 3.5%, while average hourly wages are expected to increase by 0.4% or 5.3% year-over-year. “The view among market participants is that the employment report is more important than the CPI inflation report in determining whether a 75 basis point increase or more in September is more appropriate than a 50 basis point increase and I think that is the correct view “, he said. Michael Gapen, chief US economist at Bank of America. The other important data central bank officials will consider as they meet on September 20 and 21 is the August consumer price index, released on September 13. The CPI is expected to be up but down from July’s 8.5% pace due to falling gasoline prices. Stocks sold off ahead of this week’s nonfarm payrolls report on concerns about inflation and rising interest rates. Strategists say the jobs report could be seen as a “bad news is good news” report. A strong number could prompt more selling and a rise in bond yields as investors assume it will make the Fed more aggressive in raising interest rates. “A weak number will lead to a bond rally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “It will lead to a weaker dollar and that will give us a relief rally in stocks, but I don’t know how long it will last because buying stocks in the teeth of a recession was not a great strategy. I think it will be a recession for some and maybe not for others.” Fed Chairman Jerome Powell spooked the market last week when he stressed that the Fed is committed to fighting inflation with higher interest rates and has no plans to back down. Many market professionals expected the Fed to reverse some of its rate hikes next year. Powell used his Jackson Hole speech to bluntly warn that the economy and labor market will likely feel “pain” as the Fed uses rate hikes to get inflation under control. Investors have been debating whether the Fed will use its September meeting to trigger a third hike of three-quarters of a point or retreat to half a percentage point. On Wednesday, Cleveland Fed President Loretta Mester, a member of the Fed’s policy-making committee, said the central bank should move its key lending rate above 4 percent by early 2023 and keep it there. .

Focus of the Fed

“The state of the labor market has been the Fed’s focus,” said Diane Swonk, chief economist at KPMG. “It’s one thing to say unemployment is unsustainably low, and another thing to say we’re going to increase unemployment. They mean the same thing…Labor market pain increases unemployment.” Swonk said there is a lot of focus on the August jobs report, but it is the one month economists expect the government’s monthly payrolls data to be misleading. “August tends to have the lowest response rate for the payroll survey of any month of the year, which makes it subject to some of the biggest revisions,” he said. “That number is likely to be revised a lot. It’s a number you have to take with a grain of salt.” Swonk said small business hiring was likely more affected by inflation and higher rates than larger employers. He expects there could be some degree of labor “hoarding” as companies keep workers rather than lay them off because of the difficulties in finding workers. Leisure and hospitality, for example, may not see the usual end of the summer slump because businesses were already short-staffed during the summer holiday season, he added.

Negative early next year

Both Swonk and Gapen expect the labor market to start turning out negative monthly numbers early next year as Fed tightening weighs on the labor market. However, the labor market remains surprisingly resilient so far. The Bureau of Labor Statistics this week reported a surprising 11.2 million jobs in July, a million more than expected. Tom Gimbel, founder of LaSalle Networks, a recruiting firm, said he doesn’t really see a slowdown despite high-profile tech layoff announcements. “We’re seeing a big uptick in technology…It’s continuing to grow. The biggest numbers tend to be in cyber security. I’m seeing a 20% year-over-year increase in jobs,” he said. “I see a 15% increase in project management. Companies are still doing special projects in the technology space.” He said sales jobs were also up 10 percent from last year. “We just heard the message from Jackson Hole again, the Fed is serious and we’re going to get inflation under control. The labor market is clearly out of balance,” Gapen said. “The stronger it is across the board, the more Fed tightening it will bring.”

title: “The Jobs Report Is Expected To Be Tepid And That Could Lead To An Aggressive Fed Klmat” ShowToc: true date: “2022-12-08” author: “Tracy Schippers”

Spencer Platt | Getty Images August job growth likely slowed from July’s frenetic pace, but is still expected to be quite strong, with broad-based hiring across many sectors. Monthly jobs data is always important, but the August report, released at 8:30 a.m. ET Friday, is especially important as the state of the labor market will be a major factor in the Federal Reserve’s next interest rate decision later this month. The economy is expected to have added 318,000 jobs in August, down from a surprisingly strong 528,000 jobs added in July, according to Dow Jones. The unemployment rate is expected to remain steady at 3.5%, while average hourly wages are expected to increase by 0.4% or 5.3% year-over-year. “The view among market participants is that the employment report is more important than the CPI inflation report in determining whether a 75 basis point increase or more in September is more appropriate than a 50 basis point increase and I think that is the correct view “, he said. Michael Gapen, chief US economist at Bank of America. The other important data central bank officials will consider as they meet on September 20 and 21 is the August consumer price index, released on September 13. The CPI is expected to be up but down from July’s 8.5% pace due to falling gasoline prices. Stocks sold off ahead of this week’s nonfarm payrolls report on concerns about inflation and rising interest rates. Strategists say the jobs report could be seen as a “bad news is good news” report. A strong number could prompt more selling and a rise in bond yields as investors assume it will make the Fed more aggressive in raising interest rates. “A weak number will lead to a bond rally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “It will lead to a weaker dollar and that will give us a relief rally in stocks, but I don’t know how long it will last because buying stocks in the teeth of a recession was not a great strategy. I think it will be a recession for some and maybe not for others.” Fed Chairman Jerome Powell spooked the market last week when he stressed that the Fed is committed to fighting inflation with higher interest rates and has no plans to back down. Many market professionals expected the Fed to reverse some of its rate hikes next year. Powell used his Jackson Hole speech to bluntly warn that the economy and labor market will likely feel “pain” as the Fed uses rate hikes to get inflation under control. Investors have been debating whether the Fed will use its September meeting to trigger a third hike of three-quarters of a point or retreat to half a percentage point. On Wednesday, Cleveland Fed President Loretta Mester, a member of the Fed’s policy-making committee, said the central bank should move its key lending rate above 4 percent by early 2023 and keep it there. .

Focus of the Fed

“The state of the labor market has been the Fed’s focus,” said Diane Swonk, chief economist at KPMG. “It’s one thing to say unemployment is unsustainably low, and another thing to say we’re going to increase unemployment. They mean the same thing…Labor market pain increases unemployment.” Swonk said there is a lot of focus on the August jobs report, but it is the one month economists expect the government’s monthly payrolls data to be misleading. “August tends to have the lowest response rate for the payroll survey of any month of the year, which makes it subject to some of the biggest revisions,” he said. “That number is likely to be revised a lot. It’s a number you have to take with a grain of salt.” Swonk said small business hiring was likely more affected by inflation and higher rates than larger employers. He expects there could be some degree of labor “hoarding” as companies keep workers rather than lay them off because of the difficulties in finding workers. Leisure and hospitality, for example, may not see the usual end of the summer slump because businesses were already short-staffed during the summer holiday season, he added.

Negative early next year

Both Swonk and Gapen expect the labor market to start turning out negative monthly numbers early next year as Fed tightening weighs on the labor market. However, the labor market remains surprisingly resilient so far. The Bureau of Labor Statistics this week reported a surprising 11.2 million jobs in July, a million more than expected. Tom Gimbel, founder of LaSalle Networks, a recruiting firm, said he doesn’t really see a slowdown despite high-profile tech layoff announcements. “We’re seeing a big uptick in technology…It’s continuing to grow. The biggest numbers tend to be in cyber security. I’m seeing a 20% year-over-year increase in jobs,” he said. “I see a 15% increase in project management. Companies are still doing special projects in the technology space.” He said sales jobs were also up 10 percent from last year. “We just heard the message from Jackson Hole again, the Fed is serious and we’re going to get inflation under control. The labor market is clearly out of balance,” Gapen said. “The stronger it is across the board, the more Fed tightening it will bring.”

title: “The Jobs Report Is Expected To Be Tepid And That Could Lead To An Aggressive Fed Klmat” ShowToc: true date: “2022-11-09” author: “Joan Selvester”

Spencer Platt | Getty Images August job growth likely slowed from July’s frenetic pace, but is still expected to be quite strong, with broad-based hiring across many sectors. Monthly jobs data is always important, but the August report, released at 8:30 a.m. ET Friday, is especially important as the state of the labor market will be a major factor in the Federal Reserve’s next interest rate decision later this month. The economy is expected to have added 318,000 jobs in August, down from a surprisingly strong 528,000 jobs added in July, according to Dow Jones. The unemployment rate is expected to remain steady at 3.5%, while average hourly wages are expected to increase by 0.4% or 5.3% year-over-year. “The view among market participants is that the employment report is more important than the CPI inflation report in determining whether a 75 basis point increase or more in September is more appropriate than a 50 basis point increase and I think that is the correct view “, he said. Michael Gapen, chief US economist at Bank of America. The other important data central bank officials will consider as they meet on September 20 and 21 is the August consumer price index, released on September 13. The CPI is expected to be up but down from July’s 8.5% pace due to falling gasoline prices. Stocks sold off ahead of this week’s nonfarm payrolls report on concerns about inflation and rising interest rates. Strategists say the jobs report could be seen as a “bad news is good news” report. A strong number could prompt more selling and a rise in bond yields as investors assume it will make the Fed more aggressive in raising interest rates. “A weak number will lead to a bond rally,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group. “It will lead to a weaker dollar and that will give us a relief rally in stocks, but I don’t know how long it will last because buying stocks in the teeth of a recession was not a great strategy. I think it will be a recession for some and maybe not for others.” Fed Chairman Jerome Powell spooked the market last week when he stressed that the Fed is committed to fighting inflation with higher interest rates and has no plans to back down. Many market professionals expected the Fed to reverse some of its rate hikes next year. Powell used his Jackson Hole speech to bluntly warn that the economy and labor market will likely feel “pain” as the Fed uses rate hikes to get inflation under control. Investors have been debating whether the Fed will use its September meeting to trigger a third hike of three-quarters of a point or retreat to half a percentage point. On Wednesday, Cleveland Fed President Loretta Mester, a member of the Fed’s policy-making committee, said the central bank should move its key lending rate above 4 percent by early 2023 and keep it there. .

Focus of the Fed

“The state of the labor market has been the Fed’s focus,” said Diane Swonk, chief economist at KPMG. “It’s one thing to say unemployment is unsustainably low, and another thing to say we’re going to increase unemployment. They mean the same thing…Labor market pain increases unemployment.” Swonk said there is a lot of focus on the August jobs report, but it is the one month economists expect the government’s monthly payrolls data to be misleading. “August tends to have the lowest response rate for the payroll survey of any month of the year, which makes it subject to some of the biggest revisions,” he said. “That number is likely to be revised a lot. It’s a number you have to take with a grain of salt.” Swonk said small business hiring was likely more affected by inflation and higher rates than larger employers. He expects there could be some degree of labor “hoarding” as companies keep workers rather than lay them off because of the difficulties in finding workers. Leisure and hospitality, for example, may not see the usual end of the summer slump because businesses were already short-staffed during the summer holiday season, he added.

Negative early next year

Both Swonk and Gapen expect the labor market to start turning out negative monthly numbers early next year as Fed tightening weighs on the labor market. However, the labor market remains surprisingly resilient so far. The Bureau of Labor Statistics this week reported a surprising 11.2 million jobs in July, a million more than expected. Tom Gimbel, founder of LaSalle Networks, a recruiting firm, said he doesn’t really see a slowdown despite high-profile tech layoff announcements. “We’re seeing a big uptick in technology…It’s continuing to grow. The biggest numbers tend to be in cyber security. I’m seeing a 20% year-over-year increase in jobs,” he said. “I see a 15% increase in project management. Companies are still doing special projects in the technology space.” He said sales jobs were also up 10 percent from last year. “We just heard the message from Jackson Hole again, the Fed is serious and we’re going to get inflation under control. The labor market is clearly out of balance,” Gapen said. “The stronger it is across the board, the more Fed tightening it will bring.”