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11 Mar 2015
US labour market tightening, supporting June rate hike – ING
FXStreet (Barcelona) - With US JOLTS highlighting the tightening of labour market conditions, James Knightley, Senior Economist at ING, views that the data supports the idea that Fed might start hiking rates in June.
Key Quotes
“The January JOLTS (Job Openings & Labour Turnover Survey) showed that the labour market continues to tighten. The quit rate, which is back up to 2% of total employment, is close to the previous high of 2.3% seen in early 2007. This suggests that pay is rising as employees are presumably, in general, quitting their job to move to a higher paying one.”
“Indeed, the number of job openings continues to rise with the job opening rate remaining at 3.4% while the hiring rate is trending higher. This all indicates that employment growth will remain robust in coming months.”
“With employees increasingly willing to quit we suspect that this means that employers will be thinking more and more about staff retention."
“Consequently, as firms consider options to keep their workforces happy and productive and to reduce the incentives for moving jobs, the prospect for broader pay rises.”
“This tightening of labour market conditions therefore increases the likelihood that medium-term inflation pressures will build.”
“In turn, it is supportive of the idea that the Federal Reserve will start tightening monetary policy in June.”
Key Quotes
“The January JOLTS (Job Openings & Labour Turnover Survey) showed that the labour market continues to tighten. The quit rate, which is back up to 2% of total employment, is close to the previous high of 2.3% seen in early 2007. This suggests that pay is rising as employees are presumably, in general, quitting their job to move to a higher paying one.”
“Indeed, the number of job openings continues to rise with the job opening rate remaining at 3.4% while the hiring rate is trending higher. This all indicates that employment growth will remain robust in coming months.”
“With employees increasingly willing to quit we suspect that this means that employers will be thinking more and more about staff retention."
“Consequently, as firms consider options to keep their workforces happy and productive and to reduce the incentives for moving jobs, the prospect for broader pay rises.”
“This tightening of labour market conditions therefore increases the likelihood that medium-term inflation pressures will build.”
“In turn, it is supportive of the idea that the Federal Reserve will start tightening monetary policy in June.”