Job market reaction to interest rate increases


Government data in the U.S. Manpower Market will be in the spotlight this week, because investors see to see how the aggressive federal reserve interest rate campaign to cool inflation has an impact on the labor market.

With relatively low unemployment and wages get what remains a strict labor market so far, sustainable forces will support Fed’s attitude that the economy must be strong enough to handle interest rates. On the other hand, signs of weakening can point to the more difficult times in front.

The highly anticipated non -agricultural payrolls report will be released on Friday, and is expected to show the entrepreneur to add 250,000 jobs in July, slowing from the profit of 372,000 in June. The unemployment rate is projected to remain unchanged at 3.6%. The average rate of increase in revenue per hour is also likely to not change in July at 0.3%.

On Tuesday, reports on job vacancies at the Department of Manpower and Survey of Manpower Turnover (JOLTS) are expected to show job vacancies in June it is likely to fall to 11 million from 11.3 million in May.

On Thursday, the Department of Manpower is expected to report initial unemployment claims for state unemployment allowances down 1,000 to 255,000 for the last week. It is likely to report on a sustainable claim for the week ended July 23 to rise to 1.37 million from 1.36 million a week earlier. New applications for unemployment benefits have been held near the highest level this year, in a sign that the strict labor market can loosen. Last week’s report showed that the claim was at the highest level since November and above the pre-Pandemic weekly average of 218,000.

“The strength of the labor market is the main reason for the federal reserve in disbelief in the US economic, and can also limit the next two interest rates to 50 basis points (BPS) each. Easily change the tone, “