Huitong.com December 2nd - Beijing time tonight (December 2nd) 21:30 will usher in the last non-agricultural drama before the Fed's December resolution, which is also a rare "Friday non-farm" market. Bloomberg’s median forecast was $188,000 and the unemployment rate was 4.9%. The market is currently expecting the Fed to raise interest rates by nearly 100% in December. Investors will wait and see if non-agricultural farmers can consolidate this expectation in November.
What do the forward-looking indicators say?
According to data released on Wednesday (November 30), the number of ADP jobs in the United States, which is known as “small non-agriculturalâ€, increased by 216,000 in November. The number of corporate recruits soared, hitting a new high since June, far exceeding expectations of +17. Ten thousand people, the former value is 147,000.
After the data was released, Mark Zandi, chief economist of Moody's analysis, said that the uncertainty of the election and the employment situation basically did not exist. Due to the tight labor market, the seasonal employment of retail employment increased. Although the total seasonal employment is not higher than last year, there is enough labor to meet seasonal demand.
It is generally believed that if the ADP data is satisfactory, it can basically be determined that the non-agricultural will go well, so the strong ADP support for the non-agricultural report on Friday.
★★ The following is a summary of the US non-agricultural “related data†in November ★★
Focus indicator: US November non-farm employment report
Announcement time: 21:30 Beijing time tonight
Expected median: +18.0 million vs. previous value +161,000
Highest expectations: +25,000 (Moody)
Minimum expectations: +15.0 million Deutsche Bank
Non-agricultural 6-month average: 185,000
Unemployment rate is expected: 4.9% vs. 4.9%
Employment participation rate: expected value 62.8%
Private non-agricultural employment expectation: +17 million vs. previous value +142,000
Average hourly monthly rate expectation: 0.2% vs. 0.4% before
Average hourly salary rate is expected: 2.7% vs. 2.8%
Average weekly working hours expected: 34.4VS before the value of 34.4
Non-agricultural data in November is expected to be substantially better
Goldman Sachs expects to increase the number of non-agricultural employment by 200,000 in November, after an increase of 180,000. The forecast is due to the positive data since this week, and the positive weather effects and “seasonal effects that may remain†The unemployment rate is expected to be 4.8%, the average monthly wage rate is 0.1% (significantly less than 0.4% in October), and the average hourly wage rate is 2.7%.
Jack McIntyre, portfolio manager at Brandy Global Investment Management in Philadelphia, said that in view of the hurricane Matthew that ravaged the US East Coast in October, it could pull down as many as 40,000 jobs in the month, and jobs in November The increase may be higher than expected.
Ted Wieseman, an economist at Morgan Stanley in New York, said that due to the unusually moderate temperature in the first half of November, the drag caused by the hurricane should be reversed, resulting in a good growth in jobs in November. The unemployment rate is expected to remain steady at 4.9% in November.
In addition, younger groups or return to the job market may also push up the number of non-farm payrolls in November. Jim Glassman, a senior economist at JPMorgan Chase, said the November non-farm payrolls report showed that younger groups were returning to the job market, and that the group “disappeared†from non-agricultural employment after the financial crisis. The youth group between the ages of 20 and 45 before the recession accounted for about 82% of the job market. In the worst recession, the ratio fell to a low of 79%.
Furthermore, Michelle Girard, chief analyst at Royal Bank of Scotland, said seasonal factors could make employment more than expected. Due to the tight labor market, companies are hiring scarce temporary workers every year to prepare for the upcoming holiday season (Christmas, etc.), and such seasonal employment may increase employment.
November salary growth is expected to slow down
Analysts expect wage growth to fall in November after two consecutive months of strong growth, which could give a glimmer of optimism in employment data. The average hourly wage is expected to increase by 0.2% in November and by 0.4% in October. The slowdown in wage growth may lower the year-on-year increase, which was 2.8% year-on-year in October, the largest increase in nearly seven and a half years.
Citigroup analyst Andrew Hollenhorst said that the weak salary in November was mainly due to the calendar factor, which is expected to be ignored by the Fed in the December policy meeting.
The Fed’s December rate hike is like a nail
Recent Fed officials’ hawkish rhetoric, strong economic data, and Trump’s fiscal stimulus expectations have led to a sharp increase in the probability of the Fed’s rate hike in December. According to the Chicago Mercantile Exchange's FedWatch tool, the Fed funds rate futures trend shows that traders expect a rate hike probability of 92.7% in December.
☆Recent economic data in the near future
In the past month, the market's expectation of the Fed's interest rate hike in December has been heating up. The economic data released recently have shown the prospect of a recovery in the US economic recovery, adding another "fire" to the Fed's interest rate hike.
First, the US third-quarter GDP data, which has received much attention, is eye-catching. According to data from the US Department of Commerce, the US real GDP annual growth rate in the third quarter was revised from 2.9% to 3.2%, the highest in the third quarter of 2014, and exceeded the expected value of 3%.
Second, the US consumer love base, net worth, and information workers' confidence is constantly increasing. According to data released by the World Large Enterprise Research Association, the US consumer confidence index for November was 107.1, a record high in nine years, significantly exceeding the expected value of 101.5.
In addition, market research firm Markit released data showing that the US Markit Service PMI was 54.7 in November, the second highest level in the past 12 months; and the US Markit manufacturing PMI initial value in November was 53.9, the highest level since October 2015.
All the above data show that the recent bright performance of the US economy is enough to provide strong support for the US Federal Association to raise interest rates in December.
☆ Even if the non-agricultural performance is dull, it will not affect the interest rate hike in December.
Supported by a number of strong data, even if the non-agricultural performance in November is flat, it will not affect the interest rate hike in December. As the author of Bloomberg's chief US economist wrote, unless the data is extremely bad, it will hardly affect the Fed's rate hike in December.
Shaun Osborne, chief currency strategist at Scotiabank in Toronto, also said that regardless of the performance of non-agricultural employment data, the December rate hike should be a foregone conclusion, and any change in the bitmap will be crucial.
Marvin Loh, senior global market strategist at BNYMellon in New York, said that unless the US employment data is bleak this week, others will prompt the Fed to act. Even if the employment data is particularly weak, the impact may be greatly reduced, as the transitional data will be revised.
Where is the financial market going tonight?
If the non-agricultural data in November is better than expected, indicating that the US economy continues to improve, it will undoubtedly further deepen the Fed’s interest rate hike expectations during the year. The US dollar is expected to rise and the precious metals market will be hit hard.
If it is not as expected, or will cause a certain suppression of the US dollar, the precious metal may fall back after the high.
If it is significantly lower than expected, the US dollar index will be affected by a sharp drop, and precious metals such as gold will be supported by a sharp rise.
For more information, please refer to the US Non-agricultural Specials page.
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