Less than six months ago, the Federal Reserve officials were turning their hands about the condition of the labor market. No major cracks have been revealed, but the increase in monthly jobs has decreased and the unemployment rate is increasing permanently. To maintain the power of the economy, the Fed doubled the extraordinary move to reduce interest rates.
Since then, these concerns have become vulnerable. Officials have now given rise to an extraordinary confidence that the labor market is strong and is ready to stay, which provides them with the need to keep the rates stable for a while.
In this perspective, a strategic gambling has been created, through which economists and expected to work extensively. This shows that the central bank will take time before reducing the borrowing costs and will wait for the price to be facilitated.
Johns Fast of the Center for Financial Economics at John Hopkins University said, “Job data are not yet demanding low rates, which was a senior adviser to Fed Chair, Jerome H. Powell.” So, this may guarantee a policy reaction, but in addition, inflation makes some progress. “
In numerous matrix, the labor market looks particularly stable until it is cool. The growth of monthly jobs has been solid and the unemployment rate has barely increased by 4.1 percent at its current level after the summer rise. It is also less to file for the number of Americans out of work and for weekly benefits.
“People can get jobs and find employer workers,” San Francisco Feed President Mary C. Daily said in an interview earlier this week. “I still don’t see any sign of being weak.”
Richmond Feed chief, Thomas Barcon, told reporters Wednesday that the overall economy was “solid, but not much heat.”
These terms – as well as the rapidly changing compounds led by the Trump administration have helped support the feed issue to prevent and resume the rate reduction. The consensus is that the feed will cut more twice this year, which will lead to half a percentage of points, though in recent weeks the confidence in these estimates has been lost.
Some economists have surpassed their expectations on the basis that inflation pressures will be re -created as policies like prices will be implemented. Others have been moved to the opposite direction of fear that the labor market is not as stable as it appears.
“There is a lot of happiness about the economy looks like a economy,” said Neil Dutta, head of macro -research economics. “Whenever the feed says they have time, they never have that much.”
One of the moves that has given attention is the rent rate, which is suppressed. Since the beginning of the summer, the share of unemployed Americans, which has been out of work for about six months or more, has also increased constant.
Samuel Tambus, chief US economist, Panthon Macro Economics, said he too is braking to take holidays, estimating that December level based on written notices for large -scale holidays in companies with 100 There has been a 5 % increase compared to. Or more full -time employees.
Most economists said that now, these developments are not guaranteed except for caution. Steven Kamin, who was previously run by the International Finance Division in the Fed and is now a senior fellow of the US Enterprise Institute, said that if the monthly salaries increase, less than 100,000 and unemployment rates permanently If I increase significantly, the central bank will be upset. He added that as long as inflation is under investigation, the feed can resume the reduction of rates before the middle of the year.
The largest unknown immigration for the labor market. Mr Trump has begun deporting immigrants, but it was not yet on a scale that he promised the election campaign. If pure immigration falls to zero or becomes negative, this can result in slow pace of employment, high wages in more affected sectors and reduction of unemployment rate, which reflects shrinking labor strength –
Former Fed economist Julia Coronado, who now runs the macroopolysis point, is primarily concerned about the development of these policies. He said that migrants fulfill “no alternatives” for domestic workers, he said, “If you lose construction workers, construction activity slowly goes on.”
With the increasing risk of revenue, businesses are surprisingly on the edge. If those nerves translate a wider recovery, it can be more prominent.
What do I do if I was a company’s CEO right now? Justin Woolfers, a professor of public policy and economics at Michigan University, said, “For almost any investment I can think about, the best answer is to wait three months.”
