The job market is still clinging to strength, as the country added 208,000 jobs in September, according to ADP. The payroll provider's report, which serves as a temperature check of private-sector employment in the United States, could hint at what's to come on Friday when the government releases its more detailed employment report.
That's a little bit better than the 200,000 jobs economists were expecting, and is a boost from August's 185,000 additional jobs. What's more, wages, at least in the private sector, are now 7.8% higher than last year, not too far behind inflation which currently sits at an annual rate of 8.3%.
But that's good news… right?
Yes… and no. Of course, it's a good thing that people are employed and their salaries aren't too far behind inflation. This means many Americans have jobs and are able to pay their bills. The problem is the Federal Reserve is trying to tame inflation, and that fight is also going to have some painful (but intended) consequences, including higher levels of unemployment. The economy is a speeding car right now and the central bank is trying to slam the brakes. But if the job market stays strong, that car won't be slowing down.
Ok, so what does that mean for me?
Well if the ADP report is an accurate predictor of what we will see on Friday, it means that the Fed will likely continue to hike rates—aggressively. So expect even higher mortgage rates, more expensive credit card debt, and more hits to the stocks in your investment portfolio.
And on the topic of your investments, stocks are tumbling today after a very brief rally (what's sometimes known as a "dead cat bounce"). Investors will be paying close attention to the government's jobs report on Friday, since it could bring "doom and gloom" in the form of more rate hikes.
- Kristin
0 comments:
Post a Comment