Muddled jobs data may do little to alter immediate Fed rate path
Deciding the answer could be complicated, and Friday's job market data did little to clear things up.
Hiring stalled in October, but that happened as two hurricanes hit the country, most likely substantially affecting job gains in some industries, and as strikes lowered employment numbers in manufacturing. The jobless rate was unchanged at 4.1%.
The muddled report leaves officials with little up-to-date idea of how strong hiring conditions are, even as the unemployment figure hinted that the economy is holding steady. Given that, the figures are likely to do little to change the Fed's immediate policy path. Officials are widely expected to cut rates by a quarter point next week. But the latest data also shed little light on the path ahead for the economy.
"They are going to need more data after this," said
"
Because price increases have slowed and unemployment has ticked up over the past year, the Fed lowered interest rates by half a percentage point in September. Officials are widely expected to follow that up with another rate cut at their meeting on Thursday.
What happens after that is less certain.
Fed officials have forecast two more quarter-point rate cuts before the end of the year, which would most likely mean one in November and one in December. They have also forecast further rate cuts in 2025. But
Markets are still broadly expecting a December rate cut, but they do not see one as a totally sure bet. And the path after that is up for debate.
While the latest jobs data do little to clear up the picture, Fed officials will look at a variety of other economic measures - including weekly jobless claims, wage data and anecdotal reports - to try to assess the current state of the economy in the weeks ahead.
And as investors try to understand how the Fed is thinking, they are likely to keep a close eye on both the Fed decision next week and a subsequent news conference with Fed Chair
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