Thursday, October 27, 2016

Jobless Claims On The Way To Keep The Fed On Hold In December

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*Jobless claims of 258,000 are the second week showing a slowing jobs market.
*If next week reports similar non-farm payrolls could be down month to month.
*A weak non-farm payrolls is the key to keep the Fed on hold even in December.


We recently reported that last week's jobless claims showed a slowdown. If that pace maintains the upcoming non-farm payroll ("NFP") number November 4th could slow. That could keep the Fed on hold, again.
If the NFP is in fact slower that could show up in the post FOMC statement next Wednesday and soften their wording about a hike in December. That should lift markets (NYSEARCA:SPY).
Let's first review the numbers.
The last two non-farm payroll numbers were slower than the previous month. That would signal a general slowdown that could show up in the NFP report next Friday.
Jobless Claims Track NFP
A pick up in jobless claims implies less people working. That would mean there should be fewer non-farm payrolls reported. NFP is the Fed's key jobs measure. Changes in NFP have changed the Fed's plans to raise rates in the past.
This slower economic showing in jobless claims could hint to the NFP report which can affect the Fed outcome.
Let's see the relationship between jobless claims and NFP.
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