Powell said the Fed is likely to start bond tapering by the end of 2021. However, rate hikes will depend on unemployment numbers. Many Fed officials are watching for the August jobs report to see how they should proceed. There could be some trouble on the horizon. Prior data shows nearly 2.5 million jobs were added back between May and July. Now economists are concerned that August may not have been as strong.
Yahoo Finance/Brian Cheung
Why the August jobs report will be make-or-break for the Fed
The Federal Reserve has telegraphed that it will soon take the first steps in paring back its extraordinary monetary stimulus to the economy, but Fed officials are split on exactly when to start that process.
For many of the 18 policymakers on the central bank’s Federal Open Market Committee, it could all come down to a single point of data due this week.
“A non-committal Fed puts the focus squarely on Friday’s jobs report,” ING Economics wrote Tuesday.
The August jobs report, to be released by the Bureau of Labor Statistics on Friday morning, will be the last read on employment before the Fed’s next policy-setting meeting on Sept. 21 and 22.
Read the full story, here.
CNN Business/Anneken Tappe
The Delta variant threatens to slow the jobs recovery
The US jobs recovery is about to get a reality check.
It was a strong summer, with nearly 2.5 million jobs added back between May and July even as the Delta variant started to increase Covid-19 infections — but economists are now growing cautious that August may not have been as strong.
Economists polled by Refinitiv still predict 728,000 jobs were added last month. But that forecast was revised down from 750,000 early Wednesday after a disappointing reading from ADP Employment Reports, which looks at private sector payrolls.
It was the second time in a row that the ADP report was significantly below expectations: 374,000 jobs were added in August, compared with 613,000 predicted, according to Refinitiv.
The two measures of the labor market aren’t correlated — but the ADP report, which comes out first, is seen as a barometer for the jobs data later in the week.
“Our latest report suggests that the labor market recovery has downshifted,” Nela Richardson, chief economist at ADP, told CNN Business on a call with reporters. Increased spread of the virus might again keep people from returning to work. “The final estimate of job gains for August will likely fall short.”
That doesn’t bode well for Friday.
You can read the full story, here.
Kitco News/Rajan Dhall
The technical base pattern in silver is looking stronger
The 4-hour chart below shows that silver is recovering from a long-term downtrend. The price dropped from 1st June ($28.71/oz) down to $22.29/oz. Since that point, the price has made 3 higher lows and broke through the $23 and $24/oz psychological zones.
The price has moved out of the value area of the current consolidation but the bulls will be looking to see if the $24.68/oz resistance level can be broken to the upside. Beyond that point, the next resistance zone lies at $25.69/oz.
On the downside, any break below $23/oz could spell trouble for the bulls. The grey upward sloping trendline is also important from a technical standpoint. If it breaks it could mean that this move higher was just a retracement and the downtrend could continue. If that happens, $22.29/oz would be a significant support area.
Read the full story, here.