U.S. jobs may grow steadily in August, while unemployment rate may drop to a low of 5.2% in nearly seven and a half years, allowing the cautious U.S. Federal Reserve (Fed/FED) to consider a rate hike in September.
A Reuters survey predicted that non-farm jobs would increase by 220,000 last month, up from 215,000 in July. This will highlight the vitality of the U.S. economy in the face of global financial market turmoil and China's economic slowdown, making it possible for the Federal Reserve to raise interest rates at its September 16-17 policy meeting. "We don't think this will eliminate the possibility that the Fed will consider a rate hike in September unless we see other signs of worsening data," said Sam Bullard, a senior analyst at Wells Fargo Securities. The Ministry of Labor will release its highly anticipated employment report at 20:30 Beijing time on Friday. Following the recent sharp drop in global stock markets, financial markets have sharply cut their bets on U.S. interest rate hikes in the past month. But Fed Vice Chairman Fisher told CNBC last week that it is too early to decide whether the stock market shock has reduced the urgency of a rate hike in September. Economic analysts acknowledge that employment growth may be lower than expected, as the U.S. government has underestimated the employment growth in August every year at the beginning and then revised it up later. They said the model used by the government to eliminate seasonal fluctuations in data has failed to fully grasp the statistical interference factors generated at the beginning of the new school year. Additionally, employers’ response rates to government employment surveys were generally low in August. Economic momentum is strong "Despite the turbulence of stocks this month and the growing instability of China's economy... we have not seen any signs of a slowdown in the job market," said Andrew Chamberlain, chief analyst at Glassdoor. A series of optimistic data previously released, including car sales and the property market, has shown that the US economy is moving forward with strong momentum in the early third quarter. The U.S. gross domestic product (GDP) increased by 3.7% year-on-month. If the unemployment rate fell by 0.1 percentage point as expected in August, it could fall to its lowest since April 2008 and be within the range most Fed officials believe to be consistent with a stable low inflation rate. In August, jobs in almost all industries are expected to increase generally. The only energy industry that is still struggling to deal with the plunge in oil prices last year may be the exception. Strong demand for automobiles boosts employment in manufacturing, and as real estate heats up further, employment in construction is expected to grow strongly. The average hourly wage is expected to rise by 0.2%, the same as July's increase; it may increase by about 2.2% from the same period last year, and is still far below the healthy level of 3.5% that economists believe. Some analysts believe that the decline in wages in the oil field service industry has suppressed the growth of overall salary levels. But tightening labor markets and the decision of some state and local governments to raise minimum wages should ultimately drive wage levels to accelerate, while also making the Fed believe inflation will be closer to its 2% target.
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Text source: http://news.fx678.com/C/20150904/201509041537501797.shtml
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