The data that led to President Donald Trump to dismiss the director of the Office of Labor Statistics for his discontent with the Julio Employment Report, qualifying him as “Amazado”, they are being taken as a serious evidence by the Federal Reserve (FED) officials of an economic deceleration and as a justification for the trotters of interest fees that Trump wishes.
“The latest employment report confirmed some signs of fragility and lower dynamism in the labor market,” said the governor of the FED, Michelle Bowman, designated by Trump, in a speech on Saturday, where she explained how the latest employment figures and the reviews of the data from previous months validated their concerns about the weakening of the economy. “I see the risk that a delay in the adoption of measures can result in a deterioration of labor market conditions and greater deceleration of economic growth.”
Although the signs of a weakening of the labor market could boost Trump that the Fed reduces the fees, which, according to him, would result in lower interest costs for the growing debt of the country, also contradicts his statements that his tax cuts and his immigration and trade agendas are promoting greater growth.
The comments of the political leaders, who had recently focused on increasing inflation, for example, show that the news about the decrease in employment growth in May, June and July began to change their perception of the risks facing the economy.
While only Bowman and another designated by Trump, governor Christopher Waller, advocated so far for immediate cuts from the fees, and both disagreed from the decision of last month to keep them stable, investors now estimate a probability of more than 85% of a cut in the Fed session of September 16 and 17.
The new data of the Office of Labor Statistics (BLS) published on Tuesday showed that consumer prices increased by 2.7% year -on -year in July, as in June, a figure contained by the lower prices of gasoline and food at home. However, excluding volatile food and energy costs, underlying inflation increased to 3.1% from 2.9% of the previous month, driven by increases in services such as medical care and air trips, and in goods such as furniture and used vehicles that could be related to tariffs.
The operators held their bets on the cuts in the meetings of the FED of September and December after the publication of the data.
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Cross data on employment in the US among institutions
Although the Office of Labor Statistics (BLS) remains in constant change, the Fed has abundant data that can be analyzed in search of clues about the economy.
Private data sources expanded drastically in recent years, as well as the alternatives that seek to measure the influx of customers, prices, job offers and hiring practically in real time, based on data such as online hiring sites, cell phone locations and online prices.
Groups such as the Supply Management Institute (ISM) offer important information about inflation, while the surveys of the University of Michigan, the National Federation of Independent Companies (NFBI), the Board Conference and others offer information about inflation expectations, hiring and general economic perspectives.
Administrative records constitute an important support, since they represent tabulations of real events. Applications for unemployment benefits are reported weekly by each State and compiled in a single report by the Labor Department, while data sets such as the quarterly employment and salaries of the BLS, presented by companies, have a gap, but allow to verify monthly employment growth estimates.
The Fed also has its own data collection efforts, including surveys to companies of companies, such as financial directors, and extensive interviews, although less formal, which support their book Beige, an anecdotal analysis of the economy that is prepared before each rate setting meeting. Quarterly compilations of data offer a slower vision of the health of household balances.
The president of the Federal Reserve of Minneapolis, Neel Kashkari, declared last week in an interview with the CNBC that believed that any attempt to manipulate the results of an agency such as the Office of Labor Statistics (BLS) would fail.
“You cannot falsify the economic reality … Imagine that the figures are falsified for someone’s political benefit. People will see what companies will hire or not, and therefore, the Americans will see the economy. Convincing them that inflation is not real is not a very effective strategy. Convincing someone that employment figures are better than they really are, I don’t think I will work.”
With Reuters information
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