2 May 2016
US jobs data is the highlight of the first week of a new month - BBH
Research Team at BBH, suggests that the US jobs data is typically the data highlight of the first week of a new month. It has lost its mojo.
Key Quotes
“This is more because of the Federal Reserve's reaction function than the ADP estimate that comes out a couple of days earlier. The Fed accepts that the labor market continues to strengthen. The nearest real-time reading of the labor market, the weekly jobless claims, has recently falling to its lowest level since 1973, and continuing claims are at 16-year lows. It is clearly not sufficient for the FOMC to lift rates.
Another 200k increase in nonfarm payrolls is not a game-changer. Even modest earnings growth is unlikely to do much to help the dollar. The FOMC has already taken this on board. The issue is not jobs or income; it is consumption and investment. We suspect that the dollar risk is asymmetrical. It is more likely to be sold on disappointment than to rally on a stronger report.”
Key Quotes
“This is more because of the Federal Reserve's reaction function than the ADP estimate that comes out a couple of days earlier. The Fed accepts that the labor market continues to strengthen. The nearest real-time reading of the labor market, the weekly jobless claims, has recently falling to its lowest level since 1973, and continuing claims are at 16-year lows. It is clearly not sufficient for the FOMC to lift rates.
Another 200k increase in nonfarm payrolls is not a game-changer. Even modest earnings growth is unlikely to do much to help the dollar. The FOMC has already taken this on board. The issue is not jobs or income; it is consumption and investment. We suspect that the dollar risk is asymmetrical. It is more likely to be sold on disappointment than to rally on a stronger report.”