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Bitunix analyst: Nonfarm payrolls unexpectedly cooled, with weaker employment providing the Federal Reserve room to pause rate hikes
BlockBeats reports,October 5, the United States September nonfarm payrolls increased by 29000 people, far below the market expectation of 90000 people, and the unemployment rate rose to 4.2%, while 7、August people were revised downward from total new employment, 60000 the 3-month average increase fell to approximately 50000 people. Average hourly earnings rose by only 0.1%month-on-month and 3.0%year-on-year, indicating that hiring momentum and wage pressures are slowing simultaneously. Although the 9 monthly data may have been affected by seasonal adjustments and calendar factors, and initial jobless claims remain low with corporate layoffs not increasing significantly, the pattern of “low hiring, low layoffs” shows that companies are more inclined to retain existing employees than to actively expand their workforces, with labor-market resilience shifting from strong demand to support from the existing workforce.
After the nonfarm payrolls release, the market quickly reduced expectations for October rate hikes, and the policy focus shifted further from “whether to raise rates in October” to “whether another rate hike will still be needed by year-end.” This increases the importance of the upcoming FOMC minutes,ISM services data, and subsequent inflation data; if the cooling in employment continues, the Federal Reserve will have more room to wait, but services prices and energy costs may still limit the extent of any policy shift. In particular,G7 announced that over the next 4 months it would release at most 100000000 barrels of crude oil and diesel reserves, while the United States also abandoned its diesel export ban. This may ease the short-term energy supply shock, but it does not change the underlying environment in which supplies from the Middle East and Russia remain disrupted.
Therefore, what truly warrants attention now is not a single nonfarm payrolls figure, but whether “cooling employment” can move in the same direction as “cooling inflation.” If the two move together, the need for further Federal Reserve rate hikes will decline; conversely, if energy and services prices push inflation higher again, policy may remain restrictive even with weak employment. In the fourth quarter, the tug-of-war among rate expectations, long-term U.S. Treasury yields, and energy prices will become an important variable affecting USD, stock, and crypto-asset valuations.
Original link https://m.theblockbeats.info/flash/370322