Creation figure disappointing US jobs reduces rate hike expectations – Economy and Business online

With much disappointment given the market figures in the US labor sector yesterday gave the Labor Department. It was a relevant indicator because it is one of the aspects that the Federal Reserve that country (Fed) mostly consider when changing your interest rate, which is in the range of 0.25% to 0, fifty%. However, the creation of new jobs in the largest economy in August disappointed the market, since they were created only 151,000 versus 180,000 expected. In addition, the figure is much lower compared to the 275 thousand new jobs July numbers were revised upward from 255,000 previously reported.

Just a week, the Fed President Janet ago Yellen said that US It was close to achieving full employment. He also noted that the conditions for applying an increase in the interest rate had improved in recent months. Nevertheless, with this unexpected and negative, decrease the chance that rates will increase in the next monetary policy meeting of the agency later this month.

According to the expectations of economists surveyed by Bloomberg, the option to be a rate hike in September is now only 32%, while a week ago was 42%. In exchange for a rate hike in December forecast that the odds are 60.3%, in circumstances that a week ago the projection was 64.7%.

For the senior economist strategy BICE Inversiones, Juan Pablo Castillo, “the expectation that the market had over the figure for job creation had kept pressed to emerging currencies. However, with the new results, the probability of a rise in interest rates the Fed in the very short term is slightly reduced, although the implied odds of a hike in December remain “.

the senior economist at Banco Santander, Camilo Vio, agreed that” there is less pressure advance the rate hike for September, December detriment “. However, he said the Fed “considers a set of indicators to make decisions and not a particular data” and added that “while the probability of increase in September fell, is found in about 30%, which is not negligible “.

unemployment content

The unemployment rate remained at 4.9% for the third consecutive month, which translates into 7 , 8 million people out of work. The sector that contributed to the creation of jobs was services, while industry had weak results and lost 24 thousand jobs.

This disappointing data adds to the fall in manufacturing activity in the United States, showed a decline of 3.2 points and dropped from 52.6 points from July to 49.4 units in August, reflecting that there was a contraction in the sector last month.

Dollar plummets

The least amount of jobs created in August knocked the dollar, which yesterday suffered a sharp drop of $ 9.2 and traded at $ 671.9.

It was his most important since the June 28 kick, period of high volatility in international markets because of Brexit. Despite this, in the week it had a profit of $ 3.8. Banmerchant external analyst, Juan Muzard, argued that employment figures worse than expected in the US selling dollars generated due to the lower probability that from now on the market assigns a rate hike in September. “