Saturday, September 5, 2015

The Federal Reserve could be raising rates as US unemployment rate fell and payrolls gains

Official data from US labor department the unemployment rate fell to 5.1% in August, the lowest since April 2008. This was lower than forecast, and put the measure in the middle of the 5.2% - 5.0% range the Federal Reserve considers to be "full employment." The US economy added 173,000 jobs, below the expectation for 217,000. According to US labor department described some wage growth, with average hourly earnings rising 0.3% month-on-month, and 2.5% year-over-year. The labor data report delivers the goods and solid jobs data

Meanwhile The payrolls gains for the prior two months were revised up by 44,000 combined. It's a good signal for the next federal reserve step, This was the final big data release before the Fed's meeting later this month, the federal reserve to raising rate is possible, when some economists anticipate its first rate hike in several years.

As reported by business insider, Some analysts Arguing for a move, Bank of Tokyo-Mitsubishi's Chris Rupkey wrote in a note to clients, " the monthly jobs report delivers the goods, the report is a solid one and it qualifies as the some further improvement in the economy that the Federal Reserve is waiting for before raising rates. We would be shocked if the Fed delays liftoff any further. September 17 is their date with destiny."

Another opinion, Goldman Sachs described the report as "a mix of hits and misses", and maintained their call that the Fed won't move this month. As reported from New York business news, In a speech before the jobs report release, Richmond Fed president Jeffrey Lacker said the labor market bolsters the case for raising rates. He said, "Unemployment is close to pre-recession levels, real GDP growth has been slow but steady, and inflation is tracking our objective. I am not arguing that the economy is perfect, but nor is it on the ropes, requiring zero interest rates to get it back into the ring.

Meanwhile The oil rig count tumbled for the first time in seven weeks. According to driller Baker Hughes, the oil rig tally fell by 13 to 662 this week, the steepest decline since late May.  

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