The U.S. non-agricultural employment data in November exceeded expectations. Economists expected on Friday (4th) that the Federal Reserve (Fed) may revisit raising interest rates by 3 yards in December, butWall Street Journal (WSJ) reporter Nick Timiraos, who is recognized by the market as the Fed’s megaphone, firmly stated that this report makes it possible for the Fed to slow down rate hikes in December.
The November non-agricultural employment report released by the U.S. Department of Labor on Friday (4th) showed that the number of new non-agricultural employment reached 263,000, which was much higher than Wall Street’s expectation of 200,000. Wages also increased, and the average hourly wage increased by a single month It rose from 0.5% in October to 0.6% in November, which was also much higher than the expected 0.3%, while the employment rate was steady at 3.7%.
The latest non-farm payrolls report dashed hopes of cooling wage growth and upended Wall Street forecasts in recent weeks, with investors worried after Fed Chairman Jerome Powell said the central bank was concerned that labor shortages would push wages up too quickly. Make the inflation beast more difficult to control.
Economists responded to the strong jobs data by suggesting that the Fed’s December meeting could revisit a big rate hike.
“Hourly wage growth is twice as high as expected, and that’s a big problem,” said Bryce Doty, senior vice president at Sit Investment Associates.
“Would the Fed 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 is going to get back on the agenda to raise interest rates by 3 yards. With wages growing, they will have a hard time becausethat’s what they’re most worried about。」
Dan Suzuki, deputy chief investment officer at Richard Bernstein Advisors LLC, said: “This seems to be bad news for the market. Job creation is strong, and wage pressures are still clearly continuing, but other areas of the economy are quite weak, which may show that the Fed can’t be too fast. Easing policy even as economic growth continues to decelerate.”
Although Wall Street is worried that the possibility of a hawkish rate hike in December will increase, Nick Timiraos, a reporter for the Wall Street Journal (WSJ), who is recognized by the market as the “Fed’s megaphone”, clearly denies this possibility.
Timiraos tweeted that the November non-farm payrolls report made the Federal Reserve likely to raise interest rates by 2 yards at the December meeting, and highlighted the risk of the Fed raising the terminal interest rate above 5% in the first half of 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,” said Oanda market analyst Craig Erlam.
Mike Bailey, director of research at FBB Capital Partners, said: “This is a wrong report at the wrong time. After Powell’s speech on Wednesday, investors thought that US stocks would be stable and peaceful until the end of the year. As a result, Friday’s non-agricultural data is like a With the nail that popped the balloon, investors and the Fed will turn their attention to the upcoming U.S. Consumer Price Index (CPI) report. The data will be released closer to the December meeting.”
Affected by the non-agricultural report, the main US stock index was almost out of ink on Friday, onlyDow JonesThrilling red, US bond yields showed a V-shaped rebound, according to CME’s FedWatch tool, the federal funds rate futures traders predicted that the probability of raising interest rates by 2 yards in December fell from 86% on Thursday to about 79%.