If there were any doubts that the Fed would start tapering later rather than sooner, those may have been put to rest with this morning's release of the September Non Farm Payrolls (NFP) report. While economists were expecting an increase of 180K, the actual increase was just 148K. This was the third straight month that the report came in weaker than expected.
We have also seen an increasing trend where the change in NFP in the most recent report has been weaker than the change in the prior month. So far this year, there have only been three months where the change in NFP was greater than the prior month and six months where the current month's change was weaker than the change in the prior month. As shown in the chart below, as red bars become more frequent, the Fed will be less likely to bite the bullet and finally start to taper.
This article was originally published by Bespoke Investment Group.
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