Market news
12.10.2021, 10:02

US: Discouraging Payrolls, but taper prospects remain intact – UOB

Suan Teck Kin, CFA, at UOB Group’s Global Economics & Markets Research comments on last Friday’s release of the US labour market report for the month of September.

Key Takeaways

“After the big miss in the Aug nonfarm payrolls (NFP), the pace of job creation in the US disappointed yet again. NFP increased 194,000 in Sep – the smallest advance this year – well below expectations of 450,000 and slower than the upwardly revised 366,000 gain in Aug. Cumulatively, nonfarm employment has increased by 17.4 million since the trough in April 2020, but is still down by 5.0 million, or 3.3%, from its pre-pandemic level in Feb 2020. Nonetheless, the US Labor Department’s employment situation report (8 Oct) shows that the unemployment rate improved to 4.8%, 0.4% point lower than 5.2% in Aug, and is at the lowest since the pandemic began.”

“Of the 194,000 increase in NFP, the private sector contributed 317,000 jobs (Aug: 332,000) which was offset by public sector job losses of 123,000, a reversal from an increase of 34,000 in Aug.”

“Despite another disappointing headline NFP, the US labor market continues to make steady progress to recover from the depth of job losses. At about 5 million jobs short of the pre-pandemic level, it is a vast improvement compared to the 22 million job losses at the worst point of the pandemic. In addition, job creation in the private sector remains the main driving force in the US labor market, with the creation of more than 17 million jobs since the recovery started in May 2020, vs. the cumulative addition of 670,000 government jobs.”

“As such, we believe that the Fed would not be deterred by the latest job report and will proceed with the tapering of its bond buying program at the 2/3 Nov FOMC and completing in 8 months by Jul 2022, as outlined in our report on the Sep FOMC. This will be followed by the first Fed rate increase of 25bps starting from Dec 2022, and then another 2 more 25bps hikes in 2023.”

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Feedback
Live Chat E-mail
Up
Choose your language / location
Click Subscribe to receive notifications about promotions and bonuses