US nonfarm payrolls data for November beat expectations. Economists had expected the Federal Reserve (Fed) to revise the 3-yard interest rate hike in December on Friday (4), butWall Street Journal (WSJ) reporter Nick Timiraos, recognized by the market as the Fed’s megaphone, firmly stated that this report allows the Fed to slow rate hikes in December.
The November nonfarm jobs report released by the US Department of Labor on Friday (4) showed that the number of new nonfarm jobs reached 263,000, which was far higher than Wall Street’s expectation of 200,000. Wages have also increased and the average hourly wage has risen by just one month. It has risen from 0.5% in October to 0.6% in November, also much higher than the 0.3% expected, while the rate of employment remained stable at 3.7%.
The latest nonfarm payrolls report dashed hopes of a cooling in wage growth and upended Wall Street forecasts in recent weeks, with investors worried after Fed Chairman Jerome Powell said the central bank she was concerned that labor shortages would drive wages up too quickly. harder to control.
Economists responded to the strong jobs data by suggesting that the December Fed meeting could revisit a sharp rate hike.
“The growth in hourly wages is twice as much as expected, and that’s a big deal,” said Bryce Doty, senior vice president at Sit Investment Associates.
“The Fed would be happy to see a return to strength in wage growth,” said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Diane Swonk, an economist at Grant Thornton, said: “I don’t know how the Fed will get back on the agenda to hike interest rates 3 yards. As wages go up, they’re going to struggle becausethis is what worries them the most。」
Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors LLC, said: “This appears to be bad news for the market. Job creation is strong and wage pressures clearly continue, but other areas of the economy are quite weak, which could show that the Fed can’t be too fast. Easing policy even as economic growth continues to slow.”
While Wall Street is concerned that the possibility of a hawkish rate hike in December is rising, Nick Timiraos, a reporter for the Wall Street Journal (WSJ), recognized by the market as the “Fed’s bullhorn”, clearly denies that possibility.
Timiraos tweeted that the November nonfarm report made it likely the Federal Reserve would hike interest rates 2 yards at its December meeting and highlighted the risk of the Fed raising the terminal interest rate above 5% in the first half of 2019. next year.
“Given the data we’ve seen since the last Fed monetary policy meeting, I think it would take something really shocking for the Fed to change course now,” Oanda market analyst Craig Erlam said.
Mike Bailey, director of research at FBB Capital Partners, said: “This is the wrong report at the wrong time. After Powell’s speech on Wednesday, investors initially thought US stocks would be stable and peaceful through the end of the year. As in With the nail that burst the ball, investors and the Fed will turn their attention to the upcoming US Consumer Price Index (CPI) report, the data to be released closer to the December meeting “.
Affected by the nonfarm report, the major US stock index was nearly out of ink as recently as FridayDow JonesExciting red, US bond yields showed a V-shaped rebound, according to the CME’s FedWatch tool, federal funds rate futures traders predicted that the probability of raising interest rates by 2 yards in December has dropped from 86% on Thursday to about 79%.
