US employment loses some momentum. But in the view of economists at Commerzbank, the Federal Reserve is set to stick to its plan despite signs of a weakening.
Job growth remains strong despite pace has slowed
“Even though the pace of job growth has slowed somewhat, at over 300 thousand it remains strong for this phase of the business cycle (and one should keep in mind that job growth of around 75 thousand per month is enough to supply the growing working-age population with jobs).”
“Fed Chairman Powell, in his speech at Jackson Hole, has put the markets on notice that monetary policy will continue to step on the brakes. It is therefore unlikely that the central bank will use this moderate slowdown of employment growth as an opportunity to raise key rates by only 50 bps in September.”
“We are sticking to our forecast of a 75 bps rate hike.”