Falling US Unemployment Numbers
The official US Unemployment Rate, along with the Non Farm Payrolls for September are not due to be announced until tomorrow afternoon, but some insight can be gained into the likely strength of these statistics from today’s labor market change numbers. The Challenger Job Cuts reading for the month of September has been reported as 30.477k year on year, this is a significant fall from the August reading of 40.010k.
Initial Jobless Claims for the week ending 26th September have been revealed as 287k, the prior week’s number was 297k and the expectation was for a level of 296k today. Continuing Jobless Claims now stand at 2.398M according to the latest reading for the week ending 19th September, this follows on from the prior week’s 2.443M recording, the market consensus estimate was for a number closer to 2.438M.
Steadily improving unemployment in the US meant that the jobless figures became a secondary situation for policy makers during much of the early part of this year. Officially disentangling the unemployment rate from actions on the key interest rate gave the Federal Reserve enough breathing space to maintain a loose monetary policy stance. In hindsight however this may have been a knee jerk reaction, the pace of the fall in unemployment has significantly slowed after a short series of significant and unexpected drops earlier in the year. It was this sudden fall that prompted the Fed to remove unemployment as a deciding factor from it’s forward guidance.
Calls are now growing stronger from both within and outside of the Federal Open Markets Committee to reinstate the official unemployment data as a determining factor in interest rate decisions. Existing forward guidance notes that the Fed Funds rate will remain ‘accommodative’ until at least six months after the finalisation of the Fed’s bond purchasing programme. This programme is scheduled to end this month.
Sorry. No data so far.