There were 151,000 jobsadded to the USA economy in August, below economists’ forecasts for 180,000 and a marked slowdown after two bumper months of growth.
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It was also a smaller rise than the average monthly increase of 204,000 seen during the previous 12 months.
Emerging markets are absolutely the most closely watched area.
“It appears that the funds rate should be significantly higher than it is now”, he said in the speech. Economists polled by Reuters had forecast payrolls rising 180,000 last month.
USA stock markets reacted favorably to the report. The S&P 500 ended up 9.12 points, or 0.42 percent, at 2,179.98.
Britain’s FTSE 100 was up 0.8 percent at 6,802 while France’s CAC 40 gained 0.7 percent to 4,469. June and July delivered red-hot jobs growth and the latest revisions to those figures – an overlooked but critically important bit of news – resulted in a wash.
Lacker discussed the principles behind interest rate benchmarks and guides to the appropriate level of interest rates such as the Taylor Rule. Policymakers have also highlighted worries about the global outlook and the possible repercussions of the United Kingdom vote to leave the EU.
“December is once again shaping up to be the mostly likely date of the next [rate] hike”.
USA and European share markets cheered the jobs figures’ implication that the Fed may wait until December to act.
Americans worked fewer hours last month, with the average workweek dipping to 34.3 hours from 34.4 hours in July. That’s become a divisive assumption as the Federal Open Market Committee heads into a meeting later this month. Workers’ average hourly earnings rose just three cents last month, to $25.73.
They “will want to wait another couple of months, to ensure the data does rebound in September and that August is revised higher”, Paul Ashworth, chief USA economist at Capital Economics, said in a research note. Even including August’s numbers, job gains have average a robust 232,000 per month over the last 90 days.
In light of the report, he said that Federal Reserve officials shouldn’t feel pressure to raise rates.
The health-care and social-services sector added 36,100 jobs.
The report once again highlighted the racial disparity in the jobs market. The unemployment rate rests at 4.9%.
A weak report on manufacturing Thursday made it more likely the Fed will be cautious, economists said. “Since the 15th of the month falls after the survey period, increases in bi-monthly pay are less likely to have been captured, skewing the result lower”, said Michelle Girard, chief USA economist at RBS in Stamford, Connecticut. “They should hold steady, and let the economy to steep a little longer, so the recovery can reach the most distressed communities”.
The Fed next meeting is scheduled for September 20-21. In December, the rate went up a quarter point, the first increase since the start of the recession.
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Stock investors seemed pleased that Friday’s modest jobs data might have lessened the likelihood of a September Fed rate increase.
