The Fed shifts on inflation – What does it mean?
The Fed unveiled a revision to its monetary policy, allowing for higher inflation to help support the labor market. We believe this action could keep interest rates low for years.
Beating economists' expectations, the U.S. labor market continued its recovery in August, adding 1.37 million jobs. The unemployment rate fell by almost two percentage points, to 8.4%.
Economic progress can be explained by how many jobs are created. Therefore, this was a solid report. However, there are signs that job gains will moderate going forward. Those unemployed, who characterized their status as temporary, fell to 45% versus 78% in February. Overall, data in the report fits with our thesis that current economic expansion will continue through the fall, but at a much slower pace.
Source: Bureau of Labor Statistics, Bloomberg. Data shown is from September 2019 through August 2020. This chart is being provided as a general source of information for education purposes only, and is not intended as a recommendation to purchase, sell, or hold any specific security or to engage in any investment strategy.