“The employment report had everything you could have asked for”. The market turmoil over the summer kept the Fed from raising rates at their September meeting, and policymakers chose to wait yet again at their October meeting to see more signs the USA economy was on sure footing.
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The prospect of higher interest rates initially drove down financial markets Thursday, though stock indexes finished mixed.
“However, if the data keep coming in on the strong side, investors will assume that hikes will come quicker”. The two-year note jumped to a yield of 0.89 percent, a five-year high for that note, from 0.83 percent the day before. But it would be worrisome if the slowdown continued at the same pace as in September for many more months, which would increase questions about the underlying health of the US economy, including the extent of the remaining slack in the labor market.
Janet Yellen’s finger is poised over the button.
Chicago Fed President Charles Evans, a voting member of the Federal Open Market Committee, said Friday that the report was “very good news” and that strong jobs growth would help push up inflation, according to the CNBC.
“The economy has taken a few pretty big hits here, but it looks like it has survived OK”, said Ethan Harris, global economist at Bank of America Merrill Lynch.
A Reuters survey of banks that deal directly with the Fed showed 15 of the 17 so-called primary dealers expect monetary policy tightening next month.
The solid report added to strong services sector and automobile sales data in painting an upbeat picture of the economy at the start of the fourth quarter.
The report bolstered views that economic growth will regain momentum in the fourth quarter after braking sharply to a 1.5% annual pace in the July-September period.
Bonds become less attractive in a rising interest rate environment because investors would be buying an interest rate that could be lower than the ones available in the months to come. An increase not seen since July 2009 and spurring confidence that United States inflation can and will move towards the Federal Reserve’s 2% target.
“The October surge in employment, coupled with measurable wage gains, will give the Fed the green light needed for liftoff in December”, Diane Swonk, chief economist with Mesirow Financial, wrote in her assessment.
Ahead of the holiday shopping season, retailers aggressively stepped up hiring.
Whether those numbers will be enough to get the Federal Reserve Board to raise the all-important benchmark interest rate should prompt at least two beers worth of debate if the prognosticating economists go out for happy hour after work.
The agency also says that the number of people who are “involuntary part-time workers” due to reduced hours or the difficulty of finding a full-time job “edged down by 269,000 to 5.8 million in October”.
January platinum fell $13.10, or 1.4%, to $940 U.S.an ounce, for a weekly loss of around 5%, while December copper fell 1.3 cents, or 0.6%, to $2.242 USA a pound-3.3% lower for the week.
Assets in SPDR Gold Trust, the top gold-backed exchange-traded fund, tumbled to 671.77 tonnes, the lowest since mid-August.
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The mining sector has shed 109,000 jobs since peaking in December 2014.
