US labor market: Everything is still different – Commerzbank

Commerzbank’s position with respect to the unemployment rate is very similar to last year and is currently 4.2%, having changed very little in recent months. A year ago, it was in 4.0%, increasing only very slowly in the previous months. However, the number of new jobs created has decreased significantly. A year ago, the three -month mobile average was 185,000. However, on Friday, only 139,000 new jobs were reported, which took the average of three months to 135,000. And the quarterly employment and salaries census suggests that the number of new jobs created could be reviewed significantly down again, says Commerzbank’s currency analyst Volkmar Baur.

It is unlikely that the Fed will see reasons to cut its key interest rate in 100 bp

“This suggests that, although they are creating significantly less new jobs than last year, this is not currently affecting the unemployment rate. This is probably due to the number of Americans in working age is growing much more slowly than last year, which seems completely plausible given the change in immigration policy.”

“Consequently, in the coming months, the market is likely to focus more on the unemployment rate and the development of average wages per hour that in the number of new jobs created. In the first place, the unemployment rate is not checked in the same way that the number of new jobs created. Secondly, the Fed is mainly worried how adjusted is the labor market. After all, the full employment is part of its mandate. However, there is no target figure for the new jobs created. “

“If the labor offer is growing significantly more slowly, the Fed can easily tolerate lower figures of new jobs. Since the unemployment rate has barely changed in recent months and is increasing only very slowly, if it does, it is unlikely that the Fed will see many reasons to cut its key interest rate in 100 basic points in the short term. Even if the number of new jobs is significantly lower.”