WASHINGTON–After another strong jobs report, two credit union economists are offering their forecast for what the data mean for the Fed and how aggressive it will remain with rates.
According to the Bureau of Labor Statistics, the U.S. labor market showed little sign of slowing in November, with employers adding 263,000 jobs. That volume was considered stronger than some had expected amid layoffs in the tech industry.
The unemployment rate, meanwhile, remained unchanged from 3.7% a month earlier, the BLS said.
“The November employment report showed that the labor market is still strong despite rising interest rates and slowed down activity in some sectors of the economy,” noted CUNA Senior Economist Dawit Kebede. “Average hourly earnings increased at 7.2% annualized rate, faster than the increase in October. This indicates that hiring demand is still stronger than supply. Recent job openings and labor turnover report also showed that there are more job openings available than the number of unemployed people.
“This level of increase in wages and tight labor market is not good news for the Federal Reserve's effort of fighting inflation,” Kebede continued. “However, Chairman Jerome Powell indicated that the Federal Reserve will not be making aggressive rate increase in December like previous meetings although current inflation is higher than target. It will take some time to see the effect of previous rate increases.”
The Key Figure
Added NAFCU Chief Economist and Vice President of Research Curt Long, "The key figure from the November jobs report was wage growth, which accelerated during the month. That dents hopes that inflation has peaked and that the Fed will begin rapidly decelerating rate hikes. NAFCU anticipates that the fed funds rate will exceed five percent in 2023 before the FOMC is comfortable pausing rate hikes. Credit unions remain at the forefront of inflation concerns and will continue providing safe and affordable financial products and services to Americans across the country.”
FOMC to Meet
The Federal Reserve’s Federal Open Market Committee (FOMC) will meet next week with all eyes focused on whether the Fed believes its series of aggressive rate increases this year have started to tame inflation. While some had earlier forecast a 75 basis point increase in rates, increasingly forecasters believe the increase will be 50 basis points.
As CUToday.info reported here, Fed Chairman Jay Powell said last week, “The time for moderating the pace of rate increases may come as soon as the December meeting.”
Just in Time for the Holidays, CUToday’s Free Morning Headline Email is Now Double-Free!
Don’t forget to check your Spam/Junk email folder if you haven’t been receiving your free, popular and daily CUToday.info news headlines.
And if you haven’t yet signed up for the new email solution on which CUToday.info has partnered with ResponseGenius, you can do so here. Signing up requires less than one minute of your time.
CUToday.info has received very positive response from readers following the move to an improved provider of the daily headlines, but many also noted they did need to go to their Spam/Junk folder and mark it as safe.
The new email solution has not only improved every reader’s delivery experience, but it also features a fresh, new format that is easy to read, especially on mobile devices.
Please note and/or make your IT department or email administrator aware the emails will be coming from the domains CUTodayinfo.com and CUTodayinfoReply.com.