OEXN reports: The latest data released by the United States on Wednesday showed an increase of 10 percent in ADP employment data30,000, less than expected, as the number of jobs slowed, wage growth also cooled further, hitting the smallest increase since nearly September 2021. After the release of the data, U.S. stocks opened higher;U.S. Treasury Bonds***
Employers are also increasingly reducing hiring amid high borrowing costs and lingering borrowing costs, with manufacturing down 14,000 and construction by 4,000. "Restaurants and hotels are the biggest job creators in the pandemic recovery, although more modest hiring and wage growth are expected in 2024 as the boost wears off," Wall Street analysts said in an interview with OEXN. ”
Goldman Sachs analysts said in an interview with OEXN: "The report further proves that employment demand is also gradually cooling, and the ADP data has added another fire to the Fed's dovish turn next year ahead of the blockbuster non-farm payrolls report on Friday." ”
Not only that, but with inflation and the labor market slowing down, weaker U.S. employment data has strengthened market expectations that the Fed may start cutting interest rates in 2024, with a maximum rate cut of 125 basis points this year, according to the CME Fed Watch market expectations.
However, some Wall Street banks believe that the market's bets on interest rate cuts are too aggressive. Goldman Sachs has previously pointed out that the Fed's first interest rate cut is the key to global assets, the key to interest rate cuts is employment data, and if the unemployment rate continues to rise, it may start the "Sam rule", and even if inflation does not meet the target, the Fed may cut interest rates.
Analysts at OEXN pointed out that the easing of the job market, coupled with the decline in inflation, has strengthened the market's belief that the Fed's interest rate hikes this year are over.