Unemployment rate may rise in 18 months, Fed pivot?

[Wind_FURY]

The next report for the labor market in the United States will be in December 16. I personally believe that it's going to be the first important data release for the U.S. economy before the FOMC at the and of next month. A weaker jobs report could force Jerome Powell to cut rates further even if CPI is "sticky".

[Iranus]

The next report for the labor market in the United States will be in December 16. I personally believe that it's going to be the first important data release for the U.S. economy before the FOMC at the and of next month. A weaker jobs report could force Jerome Powell to cut rates further even if CPI is "sticky".

The problem is that the BLS has confirmed it will not release its October jobs report due to insufficient data collection. Instead, all October data will be consolidated into the November report and will be reported on December 16 instead of December 5 as before. Meanwhile, the FOMC meeting is on December 16-17, which means the Fed will likely not be able to update labor data in real time. This means the Fed will have to make decisions without full data. They are in a dilemma, so it is difficult to know what the Fed's next move will be.


Source pic: x.com

[Wind_FURY]

The next report for the labor market in the United States will be in December 16. I personally believe that it's going to be the first important data release for the U.S. economy before the FOMC at the and of next month. A weaker jobs report could force Jerome Powell to cut rates further even if CPI is "sticky".

The problem is that the BLS has confirmed it will not release its October jobs report due to insufficient data collection. Instead, all October data will be consolidated into the November report and will be reported on December 16 instead of December 5 as before. Meanwhile, the FOMC meeting is on December 16-17, which means the Fed will likely not be able to update labor data in real time. This means the Fed will have to make decisions without full data. They are in a dilemma, so it is difficult to know what the Fed's next move will be.


Source pic: x.com

That probably gives Jerome Powell an excuse to leave the rates unchanged, no? He has been hawkish because of the "sticky inflation", but Trump has always been pressuring him to lower the rates.

In Japan, they just approved a stimulus package into rising inflation. That probably means they are expecting a Liquidity Crisis soon?

[Iranus]

That probably gives Jerome Powell an excuse to leave the rates unchanged, no? He has been hawkish because of the "sticky inflation", but Trump has always been pressuring him to lower the rates.

In Japan, they just approved a stimulus package into rising inflation. That probably means they are expecting a Liquidity Crisis soon?

Update: The September NFP was also released yesterday (December 20) after a long delay. Accordingly, 119,000 new jobs were created, higher than the expected 50,000, which is meant to easing hard landing fears. That said, the labor market remains fairly tight( unemployment held steady at 4.4%), and wage growth (3.8%) still hasn't cooled significantly. With unemployment still at 4.4%, the Fed cannot afford to ignore it and will likely continue to cut interest rates.

After the September NFP was released, the December rate cut expectations on the CME markets increased sharply again. It can be said that there is still a chance for the Fed to cut interest rates in December.


https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

[doomloop]

We have seen some great advancements when it comes to technologies. AI itself is one of the great achievement for mankind but to be honest, what good is AI is it eats jobs of various people? We have seen that AI can easily replace human work and it can help in cost-cutting which indeed will increase the profits. This maybe will be good for the company but it will be devastating for the individuals whose lives depend on these jobs and are now scattered because of AI. AI will always be a threat to them.

So I can agree here that maybe after a year or two, mega layoffs will be approaching and thousands of people might loose their jobs. Alternative for this will be to up-skill themselves so they can at least start earning themselves without relying on any organization.

[Iranus]

We have seen some great advancements when it comes to technologies. AI itself is one of the great achievement for mankind but to be honest, what good is AI is it eats jobs of various people? We have seen that AI can easily replace human work and it can help in cost-cutting which indeed will increase the profits. This maybe will be good for the company but it will be devastating for the individuals whose lives depend on these jobs and are now scattered because of AI. AI will always be a threat to them.

So I can agree here that maybe after a year or two, mega layoffs will be approaching and thousands of people might loose their jobs. Alternative for this will be to up-skill themselves so they can at least start earning themselves without relying on any organization.

Every change comes with a price and requires a certain trade-off. Just like when computers came along they eliminated typists, or when email came along they eliminated post offices and mail carriers. Or when smartphones came out and had camera features, it almost eliminated photographers. But then what? It creates more new jobs and we are part of that change.

Likewise, it's no surprise that many people are worried about AI, but I believe that over time. It will also create a lot of new jobs and people will gradually adapt and see it as a useful tool instead of fearing it.

[Wind_FURY]

That probably gives Jerome Powell an excuse to leave the rates unchanged, no? He has been hawkish because of the "sticky inflation", but Trump has always been pressuring him to lower the rates.

In Japan, they just approved a stimulus package into rising inflation. That probably means they are expecting a Liquidity Crisis soon?

Update: The September NFP was also released yesterday (December 20) after a long delay. Accordingly, 119,000 new jobs were created, higher than the expected 50,000, which is meant to easing hard landing fears. That said, the labor market remains fairly tight( unemployment held steady at 4.4%), and wage growth (3.8%) still hasn't cooled significantly. With unemployment still at 4.4%, the Fed cannot afford to ignore it and will likely continue to cut interest rates.

After the September NFP was released, the December rate cut expectations on the CME markets increased sharply again. It can be said that there is still a chance for the Fed to cut interest rates in December.


https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

The unemployment rate is actually a little higher than the previous month's number which was 4.3%. That's definitely going closer and closer to 5%, where it becomes very concerning for the Federal Reserve and the government. Because from that number, it usually surges higher faster like falling dominoes.

The silver-lining = higher possibility of a December rate cut of 25 BPS.

 

[wiss19]

Every change comes with a price and requires a certain trade-off. Just like when computers came along they eliminated typists, or when email came along they eliminated post offices and mail carriers. Or when smartphones came out and had camera features, it almost eliminated photographers. But then what? It creates more new jobs and we are part of that change.

Likewise, it's no surprise that many people are worried about AI, but I believe that over time. It will also create a lot of new jobs and people will gradually adapt and see it as a useful tool instead of fearing it.

I agree that there will still be jobs but eventually the jobs will reduce with the growing technology. For example, when emails came into picture, post offices were eliminated and this made hundreds of people loose their job. With emails, the servers play an important part and only a couple of employees will be required to actually monitor or work with the servers. This kept the remaining unemployed and they had to find some other jobs.

This only concludes that even if technology is making life better, it is reducing the job opportunities and this is a bitter truth about the technology. AI too is going to impact a lot on employment rate. Yes, AI can still open doors for new job opportunities but it will reduce the actual human workload and thus impacting the overall job opportunities.