(CercleFinance.com) – Returning to the US employment figures published on Friday, Commerzbank warns that “to control inflation, the Fed will probably have to raise its key rates again substantially”.
“Employment in the United States increased by 528,000 in July, which means that the labor market did not cool down, but rather accelerated”, underlines the German bank, which was only expecting 275,000 job creations.
It also points to the return of the unemployment rate to its pre-pandemic level, at 3.5%, a very tight labor market ‘likely to further fuel pressure on wages’, as shown by an income average hours up 5.2% annualized.
“The Fed’s hoped-for cooling to lower inflationary pressures has failed to materialize, so calls for another 75 basis point rate hike are likely to intensify within the FOMC,” Commerzbank said.
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