KBC Market Research Desk
KBC Bank
Details more mixed than headline figures suggest
Next week, the Federal Reserve will meet again for its six‐weekly FOMC meeting. Ahead of that meeting, we provide you with an update of our Labour Market Dashboard to give you an overview of the latest developments in the US labour market, which will be a crucial factor in the Fed’s policy decisions.
A quick look at the table below shows that latest developments were a bit more mixed that the strong headline figures suggested. Five out of our ten indicators improved further since the previous FOMC meeting (green arrows), while four weakened and one indicator stabilized. As a result, three indicators have met our self‐defined target, while only two did in September, ahead of the previous FOMC meeting.
After a poor August payrolls report, the September report showed that hiring picked up again to 248 000, returning to the trend seen earlier in the year and confirming that the poor August report was only an outlier. Also the unemployment rate extended its downtrend, falling below 6% and edging ever closer to the Fed’s full employment target of 5.4%. The details of the household survey were nevertheless more mixed as the participation rate dropped to a new multi‐year low and the share of long‐term unemployed edged higher. In addition, wage data continued to disappoint, with growth in average hourly earnings slowing to 2.0% Y/Y from 2.1% Y/Y in August. Also the JOLTS job openings report was more mixed than the headline figure suggested. While headline job openings picked up significantly and layoffs dropped further, the hires rate weakened again and continues to lag behind compared with job openings.
To conclude, the US labour market recovery remains on track with payrolls growth resuming their trend and the unemployment rate falling to a new six‐year low. A closer look at the latest figures shows however a more mixed picture, but it is too early to conclude that the recovery is slowing. We keep a close eye on the figures in the coming months to see whether the recovery in the US labour market continues to gain strength or whether the momentum is slowing somewhat.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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