Along with altering the landscape for policymakers in Washington, D.C., and traders on Wall Street, the strength in the labor market, if it persists, is expected to shift the political debate as the 2016 presidential campaign heats up. She added, “It could be appropriate” to increase the interest rates at the next policy meeting of the Fed Reserve scheduled in mid-December.
Advertisement
“This is a Fed whose intention is clear: they would like to lift rates in December and hope the economic data allow them to do it”, said Tom Porcelli, chief USA economist at RBC Capital Markets. “It could provide a real boost to the economy if we get more wages in the hands of households”.
A robust U.S.jobs report on Friday could trigger another sell-off in gold, already facing weak technicals and investor outflows. Economists expect the report to show that USA employers added 180,000 jobs in October, more than September’s increase of 142,000 jobs. Yellen, at a House Financial Services Committee hearing, pointed to a possible December “liftoff” but said rates would rise only slowly from then on to nurture the U.S. economic recovery. Driving home the point, William Dudley, the influential president of the New York Fed and a permanent voter on policy, later said the he would “completely agree” with Yellen that December is a “live possibility” for raising rates.
The ADP figure is watched closely as a pre-indicator for the non-farm payrolls report due Friday. A few lawmakers think the Fed may have created another bubble by artificially propping up the market for too long, and are concerned the interest rate hike be done carefully to avoid spooking the market. The move in short-dated Treasuries was more dramatic since they are deemed most vulnerable to Fed rate hikes.
Advertisement
The USA dollar rose against the Taiwan dollar Thursday, gaining NT$0.123 to close at the day’s high of NT$32.718 as foreign investors moved funds out of the country, placing downward pressure on the local currency, dealers said. She continued to attribute meager inflation to the transitory influences of a strong dollar and low oil prices. Average hourly earnings climbed 2.5% year-over-year, also better than consensus and the best number since July, 2009. A solid report would suggest the world’s biggest economy is shrugging off slower growth overseas and will likely give the Fed confidence to raise short-term interest rates in December. The Fed, which has not lifted rates since 2006, has been discussing tightening policy all year.
