OPINION
Market Rating Before FOMC MeetingJan 31
Nonfarm Payrolls Likely to Beat Market Expectations
*In the US, non-farm payrolls change, ADP private sector employment change, and jobless claims are formed by dividing by 10,000 in the above composite chart. The left axis of the chart shows non-farm payrolls and ADP data, and the right axis shows the jobless claims.In a position to guide global monetary policy, the Federal Reserve has maintained ultra-loose monetary policy to create a buffer against the economic effects of coronavirus (Covid-19) outbreak since last year. As a matter of fact, due to the Bank's strong expansion, the US labor market has largely recovered its losses due to the pandemic, but has not yet caught up with the levels before pandemic begins.
At this point, the fiscal authority's aggressive subsidies were also instrumental in the labor market recovery. $ 1.21 trillion infrastructure package, especially after $ 1.9 trillion financial aid plan that Democrats commissioned in the new year, has served as a catalyst in the labor market alongside the Fed's ultra-loose monetary policy.
Meanwhile, Manufacturing PMI climbed to 62.1 in June, pointing to a recovery in non-manufacturing sectors (construction, services), overshadowed by the fact that the vaccination campaign, which has been accelerated to ensure social immunity globally, reached 328 million people in the United States with current figures. The Conference Board consumer confidence index climbed to 127.3 as the growth campaign gained momentum and strong growth expectations bolstered. According to the Consumer Confidence Index, as well as the data of the ADP Research Institute, taking into account the increase in private sector employment by 690 thousand people, it can be expected that non-farm payrolls, which will be published by the US Department of Labor at 14:30 (GMT+2), may increase by 650 thousand in June, while unemployment rates may show a moderate decline.
