NOVEMBER 11, 2019 – THE ECONOMY IS HOLDING ITS OWN FOR NOW
Economists believe the latest labor market data shows underlying economic strength. Resilience in the pace of hiring indicates growth is easing, but not in free fall. The hiring rate has been near cyclical highs for a number of years. Layoffs are at historic lows as is the unemployment rate, job openings have exceeded hirings since 2015. The number of Americans filing for unemployment benefits fell more than expected last week, which is consistent with strong labor market and continued job growth. Workers remain confident about job opportunities. And finally, after years of stagnating, wages have grown at 3 percent annualized pace over the last 6 months. In a consumer driven economy, employment equals growth.
The Fed has no plans to further reduce rates this year, unless economic data warrants. Currently, the fed funds futures market prices in a 17 percent chance of a rate cut in December.