FXStreet (Bali) – John Briggs Head of Strategy, Americas, at RBS, notes that last Friday’s US NFP report was good enough to keep the Fed on track to raise rates in September.
Key Quotes
“With payrolls behind us, and some summer vacations looming, we update our recent trade ideas. The payroll report, in our view, is good enough to keep the Fed on track to raise rates in September but not good enough to put the debate over September to bed.”
“So we, the markets, and the Fed will continue to be data dependent, but we also feel that this number gives us the “some further improvement in the labor market” that the Fed laid out in the July FOMC statement.”
“Again while not a blockbuster, there were several notable positive developments in the details of the report. RBS Chief Economist Michelle Girard notes: “Earnings were up 0.2% (yr/yr +2.1% vs. +2.0% in June). The average workweek increased from 34.5 hours to 34.6 hours (very impressive). The index of total hours worked (which combines payrolls and hours worked) rose by 0.5%, the largest monthly gain since October.”
“Putting it simply, more people, working longer hours, even if the rise in wages is only modest = more income and better growth. Also of note was that full time employment rose +536k, while part time was -402k, so this measure of composition of job growth was positive.”
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