11 Feb 2015
US Jolts and NFIB release support a mid-year rate hike by Fed – ING
FXStreet (Barcelona) - Rob Carnell of ING, comments that the June rate hike expectations have been bolstered after the release of strong US jolts and NFIB data.
Key Quotes
“Although the Fed changes its measures of forward guidance too frequently for them to be of very much use, the concept of labour market slack, encompassed by the labour market conditions indicator (LMCI) has lasted rather better than some others, and contains a number of the Jolts (Job openings and labor turnover), series, in particular, the hiring rate and the quits rate.”
“The Fed’s composite index includes 17 other series (for a total of 19), and also includes the NFIB hiring intentions survey and the jobs hard to fill surveys.”
“Both NFIB and Jolts were released on Wednesday, and three out of the four indices relevant to the LMCI rose, whilst one (NFIB hiring intentions) fell, though only by one point.”
“Our own in-house measure of labour market slack, which uses many of the same indices as that of the Fed index, now shows no slack remaining in the labour market. When the LMCI is updated on 9 March, we anticipate much of the remaining slack indicated by this measure of the labour market disappearing.”
“To paraphrase Charles Plosser’s recent comments on the subject, “It is becoming hard to justify not raising rates”. We agree. A June rate hike is bolstered by these releases.”
Key Quotes
“Although the Fed changes its measures of forward guidance too frequently for them to be of very much use, the concept of labour market slack, encompassed by the labour market conditions indicator (LMCI) has lasted rather better than some others, and contains a number of the Jolts (Job openings and labor turnover), series, in particular, the hiring rate and the quits rate.”
“The Fed’s composite index includes 17 other series (for a total of 19), and also includes the NFIB hiring intentions survey and the jobs hard to fill surveys.”
“Both NFIB and Jolts were released on Wednesday, and three out of the four indices relevant to the LMCI rose, whilst one (NFIB hiring intentions) fell, though only by one point.”
“Our own in-house measure of labour market slack, which uses many of the same indices as that of the Fed index, now shows no slack remaining in the labour market. When the LMCI is updated on 9 March, we anticipate much of the remaining slack indicated by this measure of the labour market disappearing.”
“To paraphrase Charles Plosser’s recent comments on the subject, “It is becoming hard to justify not raising rates”. We agree. A June rate hike is bolstered by these releases.”