Economists surveyed by Bloomberg and Reuters expect U.S. nonfarm payrolls for September to rise by about 90,000 and 100,000, with the unemployment rate seen holding at 4.1% to 4.2%. Bloomberg also expects real personal consumption expenditures for August to increase 0.5% month over month, which would mark the biggest gain in more than a year if confirmed. Together, resilient employment and consumer spending suggest U.S. demand has not cooled in a meaningful way, reinforcing the case for the Federal Reserve to keep policy tight. Inflation remains the main constraint. Markets are also looking for faster monthly growth in both headline and core PCE for August, while core PCE was previously running at 3.3% year over year, still above the Fed’s 2% long-term target. After the Fed raised rates by 25 basis points this month and signaled that another increase this year remains possible, expectations for another 25-basis-point move in October have strengthened. With Treasury yields staying elevated, pressure is also building on corporate financing, housing, and richly valued assets.
According to BlockBeats on Sept. 27, surveys by Bloomberg and Reuters show economists expect U.S. nonfarm payrolls to increase by about 90,000 and 100,000 in September, respectively, while the unemployment rate is seen holding at 4.1% to 4.2%.
Bloomberg also expects U.S. real personal consumption expenditures to rise 0.5% month over month in August. If that reading is confirmed, it would mark the largest increase in more than a year.
Resilient demand keeps the tightening case intact
Steady labor and consumer data suggest U.S. demand has not shown a clear slowdown, giving the Federal Reserve support to maintain a tight policy stance. Inflation pressure remains the central constraint facing the Fed.
Markets expect both headline and core PCE to post faster month-over-month growth in August. Core PCE had previously risen 3.3% year over year, still above the Fed’s 2% long-term target.
October hike expectations are rising
The Fed raised rates by 25 basis points earlier this month, its first rate increase in three years, and signaled that another hike this year remains possible. Market expectations for another 25-basis-point increase in October are now strengthening.
With U.S. Treasury yields staying high, pressure is also building on corporate financing, housing, and highly valued assets.
Next week’s data will shape rate-path expectations
Job openings, PCE, ISM manufacturing, and nonfarm payrolls due next week are seen as key inputs for expectations around the Fed’s next rate path.
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