U.S. employers added 165,000 jobs in October, bringing fresh attention to Commerzbank’s forecast for a December Federal Reserve rate increase ahead of new inflation data and the Fed’s next meeting.
Commerzbank Economic Research said on Oct. 23 that inflation risks supported another increase in December. EconoTimes covered the bank’s position in earlier coverage of Commerzbank’s December forecast. That published outlook preceded the October jobs release. FXStreet reported Monday that the bank had reaffirmed a forecast for a 25-basis-point increase after the employment figures were released.
The U.S. Bureau of Labor Statistics (BLS) said October’s gain was more than three times the average monthly increase of 48,000 over the preceding 12 months. The agency revised its August and September estimates upward by a combined 84,000 jobs. Unemployment stood at 4.1%, and average hourly earnings for private nonfarm workers reached $38.00, up 0.4% from September.
The Fed left its target rate at 3.75% to 4.00% on Oct. 28. The vote was 10-2, with the two dissenters favoring a 25-basis-point increase. In September, 16 of 18 Fed participants judged that a rate above the then-current midpoint would be appropriate by year-end. Those individual assessments did not commit the committee to a December increase.
Inflation is another part of the decision. The U.S. Bureau of Economic Analysis (BEA) reported that the personal consumption expenditures price index rose 3.6% in the year through September. The measure excluding food and energy increased 3.1%. Both readings exceeded the Fed’s 2% inflation goal.
The October consumer price index is due Tuesday, Nov. 10, at 8:30 a.m. ET. The November employment report is scheduled for Dec. 4. The Fed meets Dec. 8-9 and is set to announce its rate decision Dec. 9 at 2 p.m. ET.
