LABOR MARKET – UNITED STATES

Inflation data will be key to whether Fed can hike

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Original article by Brian Chappatta
The Australian Financial Review – Page: 20 : 7-Aug-17

New data shows that a higher-than-expected 209,000 jobs were created in the US during July, while the unemployment rate was at a 16-year low. However, the upcoming release of US inflation data is likely to influence the timing of any change in monetary policy by the Federal Reserve. Bill Gross of the Janus Henderson Global Unconstrained Bond Fund says the central bank is unlikely to increase short-term interest rates until the core inflation rate rises to its target of two per cent.

CORPORATES
UNITED STATES. FEDERAL RESERVE BOARD, JANUS HENDERSON GLOBAL UNCONSTRAINED BOND FUND, BMO CAPITAL MARKETS, BANK OF AMERICA CORPORATION, TD SECURITIES, FEDERAL RESERVE BANK OF NEW YORK, FEDERAL RESERVE BANK OF MINNEAPOLIS

Fed can’t afford to delay rate hikes: Williams

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Original article by Adam Creighton
The Australian – Page: 21 : 27-Jun-17

Federal Reserve Bank of San Francisco president John Williams says there should be a third rise in US interest rates in 2017, given that the nation now has low inflation and full employment. He warns that failure to increase interest rates could risk overheating the economy, which could in turn result in higher inflation. Williams adds that the Federal Reserve should also begin reducing its balance sheet, which has risen to $US4.5trn.

CORPORATES
FEDERAL RESERVE BANK OF SAN FRANCISCO, UNITED STATES. FEDERAL RESERVE BOARD, UNITED STATES. FEDERAL OPEN MARKET COMMITTEE, RESERVE BANK OF AUSTRALIA, UNIVERSITY OF TECHNOLOGY, SYDNEY

Gary Morgan’s comment on October unemployment: Donald Trump’s victory in US Presidential race shows electors believe real unemployment is higher than official statistics suggest

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Original article by Gary Morgan, Roy Morgan Research
Market Research Update – Page: Online : 15-Nov-16

US President-elect Donald Trump consistently stated during his campaign that real unemployment in the US was well over 20% or even 25% rather than the official Bureau of Labor Statistics (BLS) U3 figure – now at 4.9% for October 2016. In May Trump stated: "We have tremendous deficits. Don’t believe the 5 per cent. The real [unemployment] number is 20 per cent. The United States is dying from within, its domestic infrastructure is crumbling and successive administrations have wasted $5 trillion in the Middle East instead of using the money to create jobs and prosperity at home." Trump’s successful candidacy shows that many Americans agree with the new President that the official unemployment figures are considerably under-stated. There is a clear lesson for Australian politicians in Trump’s success.

CORPORATES
ROY MORGAN RESEARCH LIMITED, UNITED STATES. BUREAU OF LABOR STATISTICS

Record number of Australians employed in February as unemployment falls to 10%

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Original article by Gary Morgan
Market Research Update – Page: Online : 11-Mar-16

The long-running Roy Morgan unemployment estimate shows real Australian unemployment (10.0 per cent) is consistently higher than reported by the ABS (6.0 per cent) – and the higher Roy Morgan unemployment estimate "makes sense" when one considers record low wages growth. The ABS figures released monthly lack credibility. ABS estimated unemployment of 6.0 per cent in January – recognised as a figure close to "full employment". The ABS also reports Australian wage growth at a record low of only 2.2 per cent in 2015. These two figures do not make sense. The economic fact is that when an economy approaches full employment, wages growth throughout the economy accelerates and this causes inflation. This is not happening in Australia, and nor is it happening in the US. The US Bureau of Labor Statistics claims US unemployment of only 4.9 per cent on the most reported measure. However, a broader definition of US unemployment also released by the BLS (called U6) shows real US unemployment of 9.7 per cent. This higher US unemployment estimate is a much closer estimate of the real level of unemployment in the US and very close to Australia’s level of real unemployment. Both businesses and governments in Australia and the US do their economic modelling based on the wrong unemployment data.

CORPORATES
ROY MORGAN RESEARCH LIMITED, AUSTRALIAN BUREAU OF STATISTICS, UNITED STATES. BUREAU OF LABOR STATISTICS