Investment Clock insights

Mixed payrolls, but Fed still on track to hike

Ian Kernohan

7 April 2017

There was something for everyone in the latest US Labour Market Report. On the one hand, the three month moving average for payrolls slipped to 180,000 from 200,000 last month, while on the other, the headline rate of unemployment fell to 4.5% on unchanged participation rate and the underemployment rate also fell, to 8.9%.

The US Federal Reserve (Fed) puts much more weight on labour market data than on any other information, including volatile and often misleading early estimates for GDP.

With quite a lot of data to come over the next couple of months, the Fed is still on track to raise interest rates again on 14 June, assuming that the result of the French presidential election does not rock financial markets on fears of Euro break-up.

The value of investments and the income from them is not guaranteed and may go down as well as up and investors may not get back the amount originally invested. The views expressed are the author’s own and do not constitute investment advice.