US Weekly Prospects

研报英文原文证据摘录

US Weekly Prospects

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preferences. In either case, the market didn’t like what it Slightly softer labor market persists

heard, with the curve sharply steepening and breakeven infla- While inflation has become the top concern for some Fed

tion compensation rising as the chair spoke. officials and market participants, the performance of the labor

market will also matter for the FOMC. We don’t expect the

In our view, the damage to the Fed’s credibility will add some incoming data to raise concerns about an overheating labor

urgency for the rest of the Committee to act to defend the market. Payroll growth slowed in June after a torrid start to

institution’s inflation mandate. Consequently, we have pulled the year, and we think the three-month run rate will moderate

forward our expectation for the next rate hike from 2H27 to a bit further in July. The run rate for the weekly ADP employ-

December this year, with policy rates on hold at 3.75-4.0% ment figures has steadily, if gradually, decelerated over the

thereafter. There is clearly a risk that the FOMC hikes at the past two months (Figure 1). One thing we aren’t worried

next meeting in September. Between now and then we will about is a fall-off in employment following the World Cup,

receive two jobs reports and two CPI reports. The jobs reports whose effects we think are too small to be noticed.

recently have been uneventful, and for next week’s July

report we expect a similarly moderate 75k with a likely tem- While the jobless claims data continue to signal a robust labor

porary rebound in the unemployment rate from 4.2% to 4.3%. market, other indicators, such as the Conference Board’s

However, if the CPI heats up the following week, the discus- labor differential, hint at some upward drift in the unemploy-