The jobs report may force the Fed to put the gun on the table

The Fed is focused on jobs and jobs indications have been good

All signs point to US jobs growth.

• The employment component of the ISM non-manufacturing index jumped by the most since 1997 in a surge to 57.2 from 50.7.


• The four-week moving average of initial jobless claims is at the lowest since 1973


• ADP employment was a touch softer than expected but still very solid

The bar is also low. The Fed has emphasized that anything above 150K with a steady unemployment rate will be fine.

Also keep a very close eye on wages. The consensus on average hourly earnings is +0.3% m/m and +2.6% y/y.

The risk here is that the Fed has boxed itself in. If the jobs report is strong (+200K) and unemployment declines a tick, they might be forced into a disastrous November rate hike.

The jobs report may force the Fed to put the gun on the table
The jobs report may force the Fed to put the gun on the table
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