Our forecasts are designed to anticipate changes before they occur and to help you extract meaning from the noise.
June employment report: Goldilocks
The June employment report revealed an increased pace to job growth—rebounding strongly to 222,000, up from 152,000 in May.The unemployment rate also ticked up marginally from 4.3% to 4.4%, still below the Fed’s NAIRU (non-accelerating inflation rate of unemployment) range of 4.7%-5.0%. Desipite the strong June employment report, the very low unemployment rate is still failing to translate into broader inflationary pressures.
Although job growth increased, wages lagged in this most recent report. Broader wage trends have been stuck in a holding pattern since mid-2016. Therefore, we remain wary that the recent weakness in core inflation could prove sticky, and—for now—we look for the next rate hike in 2018.