US September jobs report key after run of poor data creates market volatility at the start of October
All eyes Friday were directed towards the US September jobs report after a run of poor data at the start of October caused markets to crash early in the week before a bounce-back Thursday.
Investors yesterday chose to focus on expectations that the weak economy will prompt the Federal Reserve to be more aggressive on interest rate cuts when it meets at the end of this month, having already delivered two quarter point rate cuts in the past few months – the first monetary easing sin over a decade.
READ: Volatile US blue-chips end higher, assuage October plunge as dire services data fuels further rate cuts talk
The CME’s Fedwatch indicator now puts the chance of an interest rate cut by the Fed at its late October meeting at 90.3%, up from 77% on Wednesday and 49% a week ago.
Non-farm payrolls (NFP) are forecast to have increased by 145,000 jobs last month after gaining 130,000 in August, which would be below the monthly average of 158,000 this year.
The unemployment rate is forecast unchanged at 3.7% for a fourth straight month in September.
Average hourly earnings are estimated to have increased by 0.3% after rising 0.4% in August which would keep the annual increase in wage growth at 3.2%.
The average workweek likely held steady at 34.4 hours in September. Hiring is slowing across all sectors, with the exception of government, which is recruiting for the 2020 decennial census.
The Labor Department’s closely watched report comes on the heels of a string of weak economic reports, including a plunge in manufacturing activity to a more than 10-year low in September and a sharp slowdown in services industry growth to levels last seen in 2016.
In addition, the private sector ADP National Employment report showed a deceleration in private payrolls growth last month.
All the data provided indications that President Trump’s 15 month long US-China trade war has eroded business confidence, knocking investment and manufacturing.
Adding to the pressure, on Wednesday that the World Trade Organization had backed a US request to impose tariffs on US$7.5 billion of European goods due to the EU subsidies which were previously handed to aircraft manufacturer Airbus, sparking yet another escalation in Trump’s trade crusade.
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Story by ProactiveInvestors
Source: https://www.proactiveinvestors.com/companies/news/904188/us-september-jobs-report-key-after-run-of-poor-data-creates-market-volatility-at-the-start-of-october-904188.html
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