The Federal Reserve has been a major topic among investors for quite some time now. That’s because the Federal Reserve has been working to increase its baseline interest rate since the beginning of the year. In fact, the Fed announced in late 2014 that it would be increasing its rate by the end of 2015. However, here we are, nearing the end of the year and nothing has happened thus far. While experts, including myself were expecting some kind of movement in the month of October, a new jobs report was recently released, taking any chances of a rate hike out of the equation. Today, we’ll talk about the September jobs report, revisions to the August jobs report and how binary options traders can take advantage of the trends that are soon to come.
September’s Jobs Report Was The Nail In The Coffin For An October Rate Hike
After a poor jobs report in August, investors and economists alike were expecting the labor market to pick back up in September. After all, August has been a bad month historically for new jobs in the United States. However, the expected recovery in September didn’t happen. In fact, in the month, the United States only added 142,000 jobs. That number is a far cry from the 203,000 jobs that were expected to be added to the economy in the month and proves that the United States economy is falling victim to global economic turmoil.
August Revisions Prove To Be More Cause For Concern
August wasn’t a great month for US jobs either. However, the number that was believed to be added proved to be wrong. In fact, US jobs growth in the month of August was worse than previously reported. It was already bad enough that the US only added 173,000 jobs to the economy in the month of August, however, after new revisions it’s believed that the actual number of jobs added in the month was 136,000.
What This Means For The Federal Reserve
The bottom line here is that the Federal Reserve simply can’t raise interest rates under poor economic conditions. At this point, it seems as though the Fed has missed its chances for a rate hike in 2015. The reality is that jobs growth is a very important economic factor. As growth continues to decline, it proves to be a red flag for the state of the US economy. As a result, Wall Street now believes that there’s only a 5% chance of a rate hike in October and under a 30% chance of a rate hike by the end of the year.