While payrolls in the USA increased by 661 thousand, which is expected to increase by 850 thousand in September, unemployment, which is expected to decrease to 8.2%, declined to 7.9%. Participation in the labor force fell to 61.4%, reflecting the decreasing momentum. In the private sector, there is an increase of 877 thousand new employment. In the public sector, unlike the previous month, 216,000 jobs were lost, indicating a somewhat artificial increase before the election. The Covid-19 pandemic and efforts to contain it can affect the pace of recruitment as long as the epidemic creates uncertainty. In this process, we can see the reflections of economic activity that lost some momentum.
Significant employment increases were recorded in entertainment and accommodation, retail trade, healthcare and social assistance, and professional and commercial services in September. The greater difficulty small businesses have in recovering their activities will continue to affect the situation of households receiving social assistance. Financial stimulus package uncertainty concerns them the most. The best scenario would be for Republicans, who will lose points due to uncertainty as the election approaches, say yes to a slightly more filed package. Trump's Covid positive situation is confusing the process. The fact that Trump is well and having a normal quarantine will be considered as a better scenario in terms of not highlighting any different possibilities regarding the election. If the financial package vote, the Supreme Court vote and the situation of the television debate remain unaffected, we can continue to stay in the base scenario.
The Fed cannot draw a clear path in terms of average inflation, as the demand effect on inflation will fade. So the issue is how and under what conditions the inflation will be maintained and how much it will be allowed to rise. It is unclear whether the Fed will try to achieve the average in case of “let’s say” 3% inflation. Disinflation effects, even the threat of deflation, can be a problem in developed countries as the pandemic reduces real incomes and decreases demand. This problem in the European Union seems to be a little more obvious with the data announced today, so the strengthening of the EUR will make the ECB's hand difficult. The following period will bring a process in which no Central Bank will want its own money to become too strong. The subject of selection is a knife edge situation within the framework of the final view.
Hibya Haber Ajansı