US Economy

The US Bureau of Labor (BLS) released its employment report Friday night and it helped defuse recent marginal tensions in expectations of rising inflation and early rate hikes (charts from Calculated Risk): Total nonfarm payroll employment increased by 209,000 in July, and the unemployment rate was little changed at 6.2 percent, the U.S.

The Fed tapered another $10 billion last night.

One of the markets that has been least easy to predict this year has been US bonds.

From FOMC chief Janet Yellen’s testimony last night on the Hill: Current Economic Situation and Outlook The economy is continuing to make progress toward the Federal Reserve’s objectives of maximum employment and price stability.

From Westpac’s Elliott Clarke comes a useful report analysing inflation and unemployment in the US, and its implications for Federal Reserve monetary policy: Recently we delved into the CPI and PCE inflation detail to highlight that the recent uptick in inflation pressures looked to primarily be the result of transitory factors.

From St Louise Fed chair James Bullard today via Bloomie: Federal Reserve Bank of St.

Fed minutes below.

From HSBC comes an interesting discussion about how the FOMC might go about raising interest rate sand shrinking its balance sheet.

Good data in the US overnight was received very poorly by markets. From the top, job openings jumped (chart from Calculated Risk): There were 4.6 million job openings on the last business day of May, little changed from 4.5 million in April, the U.S.

Here we go again?

Last night saw more good US data, this time in employment.

From the AFR, at a conference today Jo Stiglitz, …listed as weaknesses the US’s poor educational performance, financial deregulation, a slump in work-force participation, an economy that “socialises losses and privatises gains” and several decades of wage stagnation for low income earners.

Right now markets don’t care about anything.

From the US Bureau of Economic Analysis last night comes the the final Q!

Crude oil is only up $5 or so since the Iraq crisis escalated (though some movement prior is probably related) but the charts look very bullish.

The RBA has been sweating on a rise in US inflation to trigger interest rate rises in that country to help lower the Australian dollar.

From Westpac’s Elliot Clarke: Leading into the June meeting, we noted that changes to the inflation and unemployment view would be minimal and that the growth outlook would be the focus.

The FOMC is out and markets suddelly see doves a fluttering.

The Australian dollar caught a break last night and fell to 93.3 cents as US inflation turned out one for the books  (charts from Calculated Risk): According to the Federal Reserve Bank of Cleveland, the median Consumer Price Index rose 0.3% (3.2% annualized rate) in May.

Cross-posted from Sober Look. More evidence is emerging in support of the growing skills mismatch in the United States (discussed earlier.) Job vacancy rates are rising much faster than hiring rates and the NFIB survey shows smaller firms are having a tough time filling some openings.