RHB | United States | Some Elusive Details on the Labor Market…

Economic Research	11 May 2015
UNITED STATES
Economic Highlights
Some Elusive Details on the Labor Market… The improvement in nonfarm payrolls, which was up 223k, and the unemployment rate, which rounded down to 5.44%, in April relative to the prior month was close to expectations. Although we managed to hit the headline payrolls print on the nose, we expected the unemployment rate figure to remain steady at 5.5%. Nevertheless, the details of the release, which tend to provide a better gauge of the overall trends in labor market conditions, seem somewhat more uneven. Generally, the labor market data did not solidify evolving expectations on Fed policy normalization; essentially, our calculations indicate that the chances of Fed tightening in June still hovered just above zero, while the odds for liftoff in September and December 2015 slid slightly to around 25% and 55%, respectively. Hence, assuming financial market conditions remain conducive along with gradually diminishing gaps in the dual mandate, we maintain our call for the Fed to initiate raising rates at the September 2015 meeting (kindly refer to our Apr 30 note, “US: Dancing Gingerly…”, for a discussion on the growing importance of financial market conditions). Below, we highlight some atypical or elusive details on the US labor market. Economist:  Thomas Lam  | +65 6533 0389
To access our recent reports please click on the links below: 06 May 2015: Early Stab at 2q15 Growth… 30 April 2015: Dancing Gingerly… 06 April 2015:Hiccup, Pothole or Quicksand? 01 April 2015: A Sectoral Lean through 2025 19 March 2015: Not Impatient but More Foggy 10 March 2015: The ECB’s Growth Forecast: Upside or Downside Risk?