Breaking News: Citi Analysts Project 125,000 New Jobs and 4.3% Unemployment Rate for Non-Farm Payroll (NFP)
In a recent note to clients, Citi analysts have predicted that the upcoming Non-Farm Payroll (NFP) report will show 125,000 new jobs added to the economy and an unemployment rate of 4.3%. This projection signals a shift in focus from inflation metrics to employment data in determining Federal Reserve policy.
Citi's forecast suggests that if the job growth is at 125,000 and the unemployment rate remains at 4.3%, the Federal Reserve may cut interest rates by 50 basis points. However, if the unemployment rate drops slightly to 4.2%, a smaller 25 basis point cut may be considered. Regardless, Citi maintains its outlook for a loosening labor market and a broader economic slowdown.
The bank emphasizes the importance of Friday's jobs report, stating that even small differences in the data could have a significant impact on Fed policy decisions. For example, if the unemployment rate stays at 4.3% but payrolls exceed 175,000, a 50 basis point rate cut is still likely. Conversely, if payrolls fall below 125,000 with a 4.2% unemployment rate, a larger cut could be on the table.
Citi also highlights concerning trends in the labor market, including slowing hiring, declining hours worked, and rising unemployment. The bank warns that historically, these indicators have preceded a US recession.
In conclusion, the upcoming jobs report and JOLTS data will be crucial in assessing the state of the economy and potential Fed actions. Stay tuned for more updates on how these developments could impact your finances and investments.