As September moves towards the tapering announcement, which will likely come for the FOMC, the August NFP, which will either make the picture clearer or a little blurry, will be watched tomorrow with wages and unemployment data, and of course on the threshold of all big and small criteria. Expectations; 725K for headline payrolls data, 610K for private sector, 5.2% for unemployment rate and 0.3% / 4% monthly/annual for wages. After signs of slowing employment growth in flash PMI and ISM details; A strong reading on the NFP side will exacerbate tapering, while weak data could fuel fears of slowing growth in the US.
As the Fed notes, a reduction in asset purchases may be on the cards before the end of the year, so each labor market data will be scrutinized for clues about how aggressive the Fed might be on contraction. In terms of policy, there will be a Fed that will refrain from a rapid transition, so in fact, not only the headline components of employment, but also the direction of indicators that are worse than the headline data are also important. ADP was weak and its relationship with NFP is not at a level to be trusted. Therefore it is not right to attribute importance, but it was seen in the details within the ISM that the difficulties faced by the industry slowed down employment. If there’s more concern than the Delta variant, there might be a bit more slowdown. Western and Eastern economies approach the event differently. Asian/Pacific economies highlight restraint, while both sides of the Atlantic promote vaccines. Thus, closure is still a last resort for Western economies. The labor market is somewhat shaped by expectations rather than reality, if not in the context of layoffs, but in adding new jobs.
Another frequency indicator is that the trend in unemployment claims is at a desirable level and we are tracking the lowest number of applications since the outbreak began. So there is no general reflection. In terms of businesses, the coefficient of feeling the concerns about the slowdown in the economy will be different. For example, labor trends in rural US states will be affected more quickly. Employment here is both lower-qualified and lower-paid. For example, there is such a distinction between service and manufacturing. There are job positions in manufacturing such as higher engineering etc. The quantity of one and the quality of the other is higher. In terms of general employment, therefore, if the trend is “decreasing-increasing” at this stage, it will show that the economic dynamics can be sustained. Just as more evidence is needed for improvement, more and more specific evidence for deterioration will be needed at this stage of the tapering phenomenon. If we are to get a reading that the market will interpret as strong, a tapering statement from the Fed on September 22 will be inevitable.
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Hibya Haber Ajansı
Kaynak: Hibya Haber Ajansı