Last Friday, the Richmond Fed’s president, Jeffrey Lacker sparked debate in a speech entitled “The Case Against Further Delay.” Lacker admitted that the US economy is no longer in an ideal state and that zero interest base rates aren’t needed to kick start the economy. The Fed member affirmed that it is time to update US monetary policy in line with the progress the economy has managed to make. Simultaneously, he is awaiting the release of more economic data in September, just as his colleagues are, in order to make a definitive decision.
According to the data published on Friday, Non-Farm Payroll employees grew by 173,000 in August, taking seasonal fluctuations into account. June and July’s values were reassessed: upped by another 14,000 and 30,000 respectively on their original values. August unemployment was down to 5.1% from 5.3% last month. It was expected that employment creation would reach 220,000 and that the unemployment level would drop to 5.2%.
Average hourly wages in the US are up eight cents last month to $25.09. In comparison with the same period last year, wages have risen 2.2%.
It’s worth noting that the latest labor market data will set the tone for the Fed’s next meeting on 16-17th September, where the members will make a decision on whether to lift the US base rate.
The picture is ambiguous: although employment creation has fallen below the average 218,000 indicator for January to June, unemployment is down even further than expected, which is indicating a further fall in underutilization of the labor market. The total number of unemployed fell by 237,000 and the work-able population fell by 41,000, indicating that more unemployed people found work in August. At the same time, the data for hourly wage growth gives a hint of optimism and will be considered as extremely important for the open market by the members of the Fed.
German industrial production in August grew 0.7% MOM (forecasted: 1.0%). It’s true that the July data was reassessed downwards to 0.9% (previously 1.4%). On the whole, the Economic Minister of the country believes German industry to be holding on to its positive trajectory.
Today is Labor Day in the US and Canada, so there are no statistics being released.