JPMorgan's economis expects non-farm payrolls in the US to increase by 125,000 according to the forthcoming report from the Labour Department. This figure, signalling a slowdown in job growth, could pave the way for the Fed to cut interest rates by 50 basis points. Fed Chairman Jerome Powell has indicated that a rate cut is not imminent, but the FOMC's decision on 7 November will be influenced by the forthcoming employment data.
Recent data shows that the labour market is stabilising, with a slight rise in the unemployment rate attributable to an increase in the labour force and immigration. With inflation close to the 2% target, the Fed can afford to focus on its full employment mandate. Unless there is a sharper slowdown, aggressive action on rates seems unlikely for the time being.
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