An article on Fox Business states “US Job growth slows again in September with just 263,000 positions added” mentioning this number beat the 250,000 estimates by experts and a deceleration from 315,000 in August. This is the lowest gain since April 2021.
Another article on the CNBC states “September job gains affirm that the Fed has a long way to go in inflation fight” where the 263,000 gain in payrolls was just below analyst expectations and the slowest monthly gain in nearly a year and a half.
So, which is it? Did the 263,000 beat expectations or miss expectations? I mean if the “experts” cannot come to a consensus on what the number is supposed to be, how are we supposed to take what they say as truth?
It appears that the “market” or “investors” took this as a negative. I guess the thought that even though the Fed had already raised rates 3% and that unemployment has not gone up and the market continues to add jobs, that somehow this is a negative thing? This is with the prior knowledge that the Fed stated that they expect to raise rates another 1-1.5% by the end of the year. This is an expectation that has not changed in almost a year. Jerome Powell announced that the Fed would be increasing rates to fight inflation last November.
The only reason this is a negative thing is that the “markets” or “investors” believe that Jerome Powell and the Fed will continue to raise rates because of this data. This in contrast to the “markets” or “investors” thinking that Jerome Powell and the Fed will stop raising rates. Jerome Powell is not going to raise rates because of this data, as he has plainly stated over and over, he is raising rates to control inflation. The fact that he has raised interest rates and it has not killed the economy is simply proof that the Fed is on the right course to a soft landing, because the American Economy is so strong.
Let’s look at the facts. First, these articles are just to get your attention to go to their website, i.e. they are for entertainment. Are you entertained yet?
Second, the American Economy has told Jerome Powell and the Fed that it can handle increased rate hikes because it has continued to grow. This allows Jerome Powell and the Fed to do what they need to do, to bring down inflation (slowly, so that it does not destroy the economy). Is that not the Fed mandate? Keep inflation under control and keep full employment? To me that is the definition of a soft landing.
What I find entertaining is all of the hoopla surrounding it and how all of these “analysts”, “markets” and “investors” have the attention spans of an infant. There is no mystery here. The American Economy is handling what the Government has messed up. All the government has to do is stay out of the way.
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