3 Jul 2015
US: Plenty of slack remaining in the labour market – RBS
FXStreet (Barcelona) - Trading Desk Strategists at RBS, view that in spite of solid US job growth and low unemployment rate, there seems to be plenty of slack left in the labour market.
Key Quotes
“June’s employment report was a mildly disappointing one, but only relative to very strong expectations. Nonfarm payrolls advanced by 223,000, a gain that (if sustained) would surely be enough to push the unemployment rate down steadily over time and likely enough to support a September 2015 rate hike by the Fed (our view).”
“There was also a decline in the unemployment rate to 5.285%, its lowest level since April 2008 (though, as we discuss below, the household survey may have been distorted by seasonal adjustment issues). And wages were flat monthovermonth, with yearoveryear growth moderating to 2.0% (squarely in line with its fivetosix year trend). In other words, despite solid job growth and a relatively low unemployment rate, there still seems to be plenty of slack remaining in the labour market.”
Key Quotes
“June’s employment report was a mildly disappointing one, but only relative to very strong expectations. Nonfarm payrolls advanced by 223,000, a gain that (if sustained) would surely be enough to push the unemployment rate down steadily over time and likely enough to support a September 2015 rate hike by the Fed (our view).”
“There was also a decline in the unemployment rate to 5.285%, its lowest level since April 2008 (though, as we discuss below, the household survey may have been distorted by seasonal adjustment issues). And wages were flat monthovermonth, with yearoveryear growth moderating to 2.0% (squarely in line with its fivetosix year trend). In other words, despite solid job growth and a relatively low unemployment rate, there still seems to be plenty of slack remaining in the labour market.”