After this, the US employment statistics for October will be announced at 9:30 pm. At this week’s US FOMC meeting, while the rate hikes were likely to be reduced, Chairman Powell indicated that the terminal rate (the level at which the rate hike cycle ends) could be higher than market expectations. aggressive rate hike prospects. Given these circumstances, the markets are almost evenly matched in terms of whether the interest rate hike by the FOMC in December will be 0.50% or 0.75%. As important indicators that affect the decision to raise interest rates are gaining attention, the latest employment statistics are also attracting attention.
The previous September US employment statistics showed that the number of non-farm employees increased by 263,000. Although the number is slightly lower than the market forecast of around 270,000, it is showing steady growth. The unemployment rate, which had been expected to remain at 3.7% in August, has fallen to 3.5%.
Looking at the breakdown, the increase of 83,000 people in the leisure and hospitality sector is conspicuous. The post-pandemic recovery has been slower than other sectors, and overall employment has increased beyond pre-pandemic levels.In the United States, the number of jobs is still 952,000 fewer than before the pandemic, and there is room for recovery. That aspect is big. However, given that the sector is quite sensitive to the economy, the strong recovery in this sector gives a favorable impression.
On the other hand, employment decreased in the retail and transportation/warehouse sectors in September. The retail sector saw a large increase of 42,600 people in August, and there is a side effect of that increase. However, since both the retail sector and the transportation and warehousing sector are sensitive to the economy, this is leading to a sense of caution.
The forecast for this time is an increase of 195,000. The rate of increase has slowed, from 537,000 in July to 315,000 in August and 263,000 in September.
However, the increase of 195,000 people is not a bad level in a situation where the number of employees as of August exceeds the number of employees before the pandemic. Looking at the 10-year period from 2010 to 2019, before the turmoil in the employment market due to the corona crisis, the average number of employees in the non-agricultural sector increased by 180,000, and the increase of 195,000 is slightly strong. did.
The unemployment rate is expected to worsen from 3.5% in the previous survey to 3.6%, but this is seen as a reaction to the 0.2 percentage point drop in the previous survey from 3.7% in August.
Looking at related indicators, the ISM manufacturing industry in October slowed down from September to 50.2, which is stronger than market expectations. Of the breakdown, the employment sector improved by 1.3 points from the previous time to 50.0, and recovered to 50, which is the boundary between positive and negative judgments. The non-manufacturing business index was weak at 54.4, lower than the September forecast and market expectations. The employment sector deteriorated significantly by -3.9 points, falling below the borderline 50 to 49.1. This is a rather alarming result.
The number of ADP employees was 239,000, which greatly exceeded the previous 192,000 and the market forecast of 178,000, which is a fairly strong result.
Looking at the number of new applications for unemployment insurance on a weekly basis, the situation for the week that includes the 12th, which is the same as the employment statistics, is slightly weaker at 209,000 in September and 214,000 in October.
Looking at these various related indicators, I get the impression that predictions are quite difficult.
Although there are various factors, the impression is that the US employment market is solid when the numbers around the forecast come out. It may lead to dollar buying rather than a level that would be a hurdle to a large interest rate hike in December. However, the U.S. employment statistics, especially the number of nonfarm payrolls, is an indicator that has some deviation from the forecast. If the growth is weaker than expected, it may lead to dollar selling in the form of further strengthening the prospect of a reduction in interest rate hikes to 0.5 percentage points in December.
Depending on the result, the US dollar may move significantly or be active, so be careful. Since USDJPY continues to fluctuate greatly, we believe that it will be an easy currency pair to target if there is movement after the US employment statistics.