USA: employment situation remains resilient (Pepperstone)

(CercleFinance.com) - Commenting on the US jobs report released earlier this afternoon, Michael Brown, Senior Research Strategist at Pepperstone, believes it shows that "the overall employment situation remains resilient" in the US.


He points to a slightly stronger-than-expected rebound in nonfarm payrolls (to 227,000) in November, after a weather-affected October, and thus considers that the labor market continues to normalize.

Against this backdrop, Michael Brown still expects the Fed to cut rates by 25 basis points later this month, and believes that the slight rise in the unemployment rate to 4.2% could embolden some of the doves on the FOMC.

'That said, if the current degree of labor market resilience persists into 2025, the employment situation could force the FOMC to slow the pace of policy normalization', warns the analyst, however.

He also points to risks to the inflation outlook becoming increasingly uncertain, against the backdrop of the new Trump administration's tariff plans and the likely implementation of further tax cuts.

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