Asian shares dipped last Friday, in anticipation of key U.S. employment data later in the session that was expected to advance the case for a Federal Reserve interest rate hike as early as next month.
U.S. Nonfarm Payroll report measures the change in the number of newly employed people in the country, excluding workers in the farming industry. A reading which is higher than the market forecast is bullish for the dollar.
Economists had expected the data to show that U.S. employers added 180,000 jobs in October, above September’s increase of 142,000 jobs. In fact, new U.S. applications for jobless benefits last week recorded their biggest increase in eight months, but remained above the threshold associated with a healthy labor market.
Economists Disagree
Economists among the officials of the central bank disagree. According to Jennifer Vail, head of fixed-income research at U.S. Bank Wealth Management in Portland, Oregon, “We’re a little below consensus.”
Vail said that , “…it looks as if as long as we hit a 150-number, the Fed will think it’s consistent with labor tightening,” she said, adding that U.S. yields and futures were increasingly showing expectations for a December hike.
Federal Reserve Chair Yellen and New York Fed President William Dudley repeated this week that the U.S. was ready for higher interest rates if and when economic data justified them.
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