Employment reporting: will it facilitate or prevent changes in monetary policy?

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Although it sounds commonplace, the September employment report will be a key piece for the future of monetary policy in particular and of financial markets in general.

Although the members of the Federal Reserve try to sell the same speech that they had in June, the situation has changed a lot.

The strong recovery experienced by non-farm payrolls between June and July seemed to facilitate the monetary authorities’ decision to gradually begin to tighten their policy to prevent inflation from spiraling out of control, while the labor market gave clear signs of recovery.

However, the August surprise raises too many questions that could begin to be answered with the September report.

Analysts estimate payroll growth of 500,000 workers, double what was experienced in August, but well below the increases in June and July.

In addition to the relevance of the number, the subsequent analysis will be very interesting.

If the figure comes out in line with the estimates, will it be enough to warrant the start of the reduction of the bond buyback program by the Federal Reserve?

If the variation falls short despite not being such an ambitious estimate, will concerns about inflationary pressures begin again due to the inability of the Federal Reserve to act to contain them?

The Institute for Supply Management will release its non-manufacturing activity indicator on Tuesday.

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