7 Sep 2015
US NFP a mixed bag, Dec Fed hike core view - Nomura
FXStreet (Bali) - According to Nomura's North America Economists, last Friday's US August employment report was a mixed bag, although it doesn't alter the bank's central view of a December liftoff.
Key Quotes
"The August employment report was a mixed bag, but provided evidence of further progress toward “full employment,” albeit with less momentum than observed in recent months."
"Most notably, the unemployment rate declined by two-tenths and wage growth accelerated."
"If the FOMC is confident in the Phillips curve, these developments are positive for the inflation outlook and could give it more confidence that inflation will gradually pick up in the near term."
"In that sense, the probability for liftoff in September increased but only marginally. We think that a single data point is not sufficient to make the majority of FOMC participants “reasonably confident” that inflation will turn up given the recent gyrations in exchange rates, crude oil prices and other wage metrics."
"Moreover, concerns over future economic activity associated with the recent tightening of financial conditions and the deepening economic slowdown in China weren’t quelled by the employment report, which was surveyed in early August."
"Our central case is still for a December liftoff. There is still more than a week to the September FOMC meeting and how financial markets and key data releases - such as August retail sales (15 September) and August CPI (16 September) - evolve will be important. As such, any debate on a September liftoff is far from complete.
Key Quotes
"The August employment report was a mixed bag, but provided evidence of further progress toward “full employment,” albeit with less momentum than observed in recent months."
"Most notably, the unemployment rate declined by two-tenths and wage growth accelerated."
"If the FOMC is confident in the Phillips curve, these developments are positive for the inflation outlook and could give it more confidence that inflation will gradually pick up in the near term."
"In that sense, the probability for liftoff in September increased but only marginally. We think that a single data point is not sufficient to make the majority of FOMC participants “reasonably confident” that inflation will turn up given the recent gyrations in exchange rates, crude oil prices and other wage metrics."
"Moreover, concerns over future economic activity associated with the recent tightening of financial conditions and the deepening economic slowdown in China weren’t quelled by the employment report, which was surveyed in early August."
"Our central case is still for a December liftoff. There is still more than a week to the September FOMC meeting and how financial markets and key data releases - such as August retail sales (15 September) and August CPI (16 September) - evolve will be important. As such, any debate on a September liftoff is far from complete.