Citi Analysts Predict 125K New Jobs and 4.3% Unemployment Rate for NFP
Citi analysts have projected that the upcoming Non-Farm Payroll (NFP) will see the addition of 125,000 new jobs and an unemployment rate of 4.3%. This shift in focus from inflation to employment data is expected to influence Federal Reserve policy decisions.
The projection suggests that a job growth of 125,000, along with a 4.3% unemployment rate, could lead the Fed to cut interest rates by 50 basis points. If the unemployment rate drops to 4.2%, a smaller 25 basis point cut may be considered, but the overall outlook points towards a loosening in the labor market and a broader economic slowdown.
Citi highlights the volatility in the labor market and emphasizes the significance of even small differences in job readings on Fed policy. For example, if payrolls exceed 125,000 with a 4.3% unemployment rate, a 50 basis point rate cut is still likely. Conversely, a decrease in payrolls below 125,000 with a 4.2% unemployment rate could lead to a larger cut.
The bank warns of ongoing labor market weakening, citing slowing hiring, declining hours worked, and rising unemployment as key trends to watch. They anticipate that if this cycle continues, it could eventually lead to a US recession.
In conclusion, the upcoming jobs report and JOLTS data will play a crucial role in evaluating the state of the economy and potential Fed actions. Stay informed and keep an eye on these indicators to make informed decisions about your finances.
