Will September’s Jobs Report affect the FED’s decision to raise interest rates?

Will September’s Jobs Report affect the FED’s decision to raise interest rates?


Welcome to Illuminati Silver, we tell you
the truth about silver. Today is Thursday 3rd September 2015 and we are going to review
tomorrows US Jobs Report and its potential impact on the FED’s Interest rate decision.
With a Fed rate increase on the horizon, the jobs data becomes that much more important
In early August, Kathleen Bostjancic, an economist at Oxford Economics USA Inc. said “on a
scale of one to 10, if you asked me how important the employment numbers are, I’d put it at
a 10,” “The next two figures are like 10-plus-plus;” meaning that September and October figures
were even more important. However, Bloomberg came out with the headline
today saying : Don’t Trust Friday’s U.S. Jobs Report
Now We quote them: ‘If the U.S. economy added a ton of jobs
in August, the promised increase in borrowing costs will be seen as a done deal for this
month. If employment falters, the soothsayers of finance will scribble that the Fed stays
on hold for a while longer. Except that it turns out that the August report is the least
trustworthy of the monthly jobs figures.’ Harm Bandholz, the chief U.S. economist at
Unicredit in New York, has done the maths on the Bureau of Labor Statistics figures.
He found that August has had the lowest average monthly gain since 2011.‘So it shouldn’t
be a surprise if it turns out that the economy didn’t add the forecast 217,000 jobs last
month after all;’; Bloomberg quotes as August’s average in the past four years is a paltry
102,000. Bloomberg’s world interest-rate probability
calculator says traders and investors now see a 32 percent chance of the Fed raising
rates this month, up from 24 percent a week ago. History would suggest that relying on
Friday’s economic report to gauge whether the Fed should move would be a mistake — both
for traders and for policy makers. However, Andrew Soergel of US News published
the headline yesterday: ‘U.S. Job Growth Speeds Up in August’.
‘U.S. job growth picked up the pace last month as the labor market tacked on 190,000
new positions,’ according to the ADP National Employment Report issued on Wednesday.
August’s employment numbers clocked in slightly below analysts’ expectations but were still
an improvement from a surprisingly weak July. July’s previously reported 185,000 new jobs
were revised down further to 177,000 this month, marking the labor market’s slowest
pace of growth since March. The ADP numbers are released at the beginning
of each month, usually a few days before the Labor Department publishes its own more encompassing
employment report. Though the ADP figures offer a glimpse of what could come out of
the government’s official analysis, which will be published tomorrow, the two estimates
draw from different pools of data and don’t always line up.
“It’s really these last two weeks that have been a real problem in terms of China and
market volatility and all of these other things,” Phil Orlando (chief equity market strategist
at Federated investors) says. He added; “If you and I had had this conversation three
months ago, I would have told you I’m locked in on September. But I’m less locked in on
September today than I was three months ago.” Robert Hennelly of CBS Money Watch states:
“Conventional wisdom holds that if the Bureau of Labor Statistics reports Friday that the
U.S. added at least 200,000 jobs, the economy will still be considered in “recovery” mode
and the Fed will be more likely to move ahead with a rate hike, the first in nearly a decade.”
So, should we be hyper-focused on Friday’s jobs report as the way to most accurately
judge the relative health of the U.S. economy and the future of interest rates? “Definitely
no,” said Jared Bernstein, senior fellow at the Center on Budget and Policy Priorities.
“I am frankly concerned that so much reliance is being put on such a noisy indicator that
reflects just one month.” Bernstein, who has served as a top economic
advisor in the Obama administration, warned that taken alone, the jobless rate can be
deceiving. “When the unemployment rate falls, it’s not necessarily good news,” he said.
“It could mean you had more jobs created, but it could also mean more people dropped
out of the labor market.” For Bernstein, the more relevant data points are indicators like
wage growth. He says; “If a labor market is truly nearing full employment, we should see
more in the way of wage growth, something we have seen in the past.”
It could take a blockbuster payroll report Friday to nudge the Federal Reserve into raising
interest rates this month, but after recent market turmoil, some economists say the Fed
won’t move even if the job gains are eye-popping. “September is most probably off the table,”
says economist Jesse Hurwitz of Barclays Capital. The Fed hasn’t raised its benchmark rate since
2006, and it has hovered near zero since the 2008 financial crisis.
Economists expect the Labor Department to report that employers added a solid 218,000
jobs in August, in line with the 211,000 average monthly additions so far this year. Payroll
processor ADP said on Wednesday (which we mentioned earlier) its own sampling showed
businesses added 190,000 jobs last month. But Hurwitz says even 300,000 gains, a further
drop in the near-normal 5.3% unemployment rate and accelerated wage growth won’t move
the Fed’s needle. His reasoning is simple: It takes at least a couple of months for battered
markets to affect the real economy and the impact likely won’t be evident in economic
reports released before the Fed’s September 16-17 meeting. “Stocks have fallen nearly
7% the past couple of weeks, notwithstanding Wednesday’s rally, oil prices have been volatile
and the dollar has strengthened, developments triggered mostly by China’s economic slowdown.”
So is Peter Schiff right when he said on Kitco News this week, when asked whether he thought
the FED would raise interest rates – he replied “I don’t think they’re really
considering it or ever have” – Time will tell.
Our view is that we are at an impasse. If the job figures are good there will be pressure
to raise rates. If not they are unlikely to be raised. However if they are good, will
the FED risk a stockmarket collapse by raising rates, in view of the losses recently experienced?
Equally, if they don’t raise rates, then there may be a lack of confidence in the FED
and the markets fall anyway? This is the dilemma – an answer to which will be known in a
little over 2 weeks’ time. We hope you have found this video if not useful.
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@illuminatisilv1. Disclaimer:
Silver Illuminati owners come from a background of Banking, International Wealth Management
and Economics. Having now retired from these worlds we are not qualified to give investment
advice. Therefore, this and other productions must not be deemed to be giving such advice
and merely represent the personal views of its owners.

13 Comments

  1. I also agree that there is a high probability of a minor rate increase only as a show of market confidence. Anything below the 25 basis points level should not send people fleeing gold and silver

  2. At this point I don't believe it makes much difference . Buying and selling slips of paper are having little to do with producing products and services . Who really believes most of these government statistics ? With all the QE, almost zero interest and stock markets in the stratosphere one would think the economy would be booming beyond belief yet its as fragile as an egg . Maybe they have kicked the can down the wrong road 🙂

  3. Most of the economic numbers we get from govt/ fed , are lies. This whole world is controlled by satanic/luciferan liars .   The best us peons can do, is to try and not be victims of the endless lies. On another note, gold continues to sink lower. I expect to see gold under $1100 by end of sept.

  4. My two cents: they probably won't yet, but it doesn't mean that they can't ever. Usually the economy picks up around November and December. They will probably raise rates early next year. This stock market slump is probably going to look like the correction in 2011. Just a correction, not the end of the world.

  5. For those who discount "algorhythmic trading" or "high-frequency trading" or "computers making trades all by themselves" or "automatic trading" (whichever way you've heard it described, it's all the same thing), looking at the last three days silver charts, I noticed a 20¢ to 35¢ spike essentially at exactly the same time each day, followed by "a return to the starting position" within two hours.

    I found it interesting that the spike on September 1st was about 20¢. the spike on the 2nd was about 30¢, and today's spike was about 35¢.

    If you look at Kitco's current chart at http://www.kitco.com/charts/livesilver.html you'll see that, when all three days are overlaid, the pattern simply jumps off the screen at you!

    I don't believe that the spikes have anything at all to do with the real, physical market. It's far too regular.

    I think that the computers are programmed to anticipate "some announcement", and whenever that announcement lands, that's when things could get interesting…in the way the Chinese say "may you live in interesting times."

    Has anyone else noticed such obvious patterns "just before any given anticipated event" as well? I wonder if anyone's done any FIRM research on how these patterns appear before a rise, versus before a fall?

  6. Thinking at first glance:

    yes i believe it affects it… to a degree…. but interest rates will not go up. fragile growth…. nervous meetings in closed doors. i honestly think they don't know what to do some times in the position they are in currently….. They may look strong but looking into some of there faces you can see the fear in them as well as strength.

    regardless of the situation in the economy it wouldn't surprise me if they didn't raise rates for another 2-3 years. i would say it would be part of a 10 year plan to normalize the economy and take drastic action when required… is it required to raise rates? yes to a degree… i would at least put another year on it if i was in the position they are. will they stick to a plan they possibly made a number of years ago or raise them…only time will tell.

    (plot twist…. they open a proposal to go back on to the gold standard)…. end of bear market 😉 )

  7. so the world won't end in sept ……..what a relief I was going down in my bunker lol………I think the fed won't raise rates or if they do it wont be anything significant just a semi educated guess thanks IS…..

  8. So they are going to raise rates on everyone including themselves with 19 Trillion in advertised debt?  Lol.  There employment numbers mean nothing until the include people not looking anymore and under employed.  Start prepping.

  9. Why would the Fed raise rates? Things are looking bleak. A good jobs report would upset the fragile stock market (and rest of the economy), wiping out untold amounts of boomers investments, just when they need them. A bad jobs report would continue the long overplayed 0% policy that should have ended years ago. This collapse is going to be a doozy when it happens.

  10. Another interesting submission. But I have heard from Ron Paul, but can't confirm he is correct, that the way agencies determine U.S. job stats has changed over time. If so, comparing rates from years ago, and the way the FED has used these stats, may be an invalid indicator of economic growth or lack thereof when looking at long-term trends. What are your thoughts?

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