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Hawkish Fed May Not Be Deterred By Spate Of Inflation-friendly Data

FerneHrv8635863812502 2022.11.16 10:59 조회 수 : 0

By Howard Schneider

WASHINGTON, Oct 7 (Reuters) - Dropping job vacancies, a dip in rental costs and signs of growing consumer caution may bolster the Federal Reserve's hopes it can still slow the U.S. economy - and inflation - without causing a full-blown recession or dramatic rise in unemployment.

U.S. central bank officials remain adamant that inflation is their prime focus, tekne kiralama bodrum and, even as they site what Atlanta Fed President Raphael Bostic this week called "glimmers of hope," they remain on message about their determination to slow the pace of price hikes, a group mantra that galvanized after policymakers stumbled last year in thinking inflation wouldn't take root.

"We are still decidedly in the inflationary woods, not out of them," Bostic said after noting that some recent data had broken in the Fed's favor.

Still, those "glimmers" may show the impact of Fed rate increases beginning to be felt beyond financial market volatility and in the real economy where prices are set.

Rents, a major component of the consumer price index, declined in the three months from July through September according to a recent report from Apartments.com, reversing a year and a half of strong growth.

Consumer spending in August barely grew after adjusting for inflation, motor yat kiralama and recent census surveys have shown 40% of people struggling to pay bills - and perhaps ready to tighten their wallets in a step that could slow demand and ease prices.

Job vacancies in August dropped by 1.1 million, the largest decline outside the onset of the coronavirus pandemic and a trend, if continued, that would fit a central piece of the Fed's narrative for how inflation could be brought down without workers paying too steep a price.

The hope is that hiring can continue even as the pressure for higher wages eases, with companies trimming their employment plans without resorting to layoffs.

The Labor Department's employment report for September, due to be released at 8:30 a.m.

EDT (1230 GMT) on Friday, will add an important data point, with policymakers hoping the number of new additional jobs slows from the torrid pace seen during the post-pandemic reopening of the economy - an average of about 512,000 jobs gained per month since the beginning of 2021 and 381,000 per month in the last six months - to something like the average 183,000 per month reported from 2010 through 2019.

A Reuters poll showed economists at the median expect that 250,000 jobs were added in September.

GLOBAL REPERCUSSIONS

The Fed almost certainly will deliver its sixth rate hike of the year at its next policy meeting on Nov.

1-2, with markets widely expecting a fourth straight three-quarters-of-a-percentage-point move.

That comparatively large step had not been used since the early 1990s, but when the Fed's preferred measure of inflation spiked in the spring to more than triple the central bank's 2% target, policymakers pivoted quickly towards the fastest tightening of credit since the 1970s and early 1980s.

The repercussions have been global - a soaring dollar, rising concern of a worldwide recession, signs of stress in some financial markets, motor yat kiralama and calls for the Fed to at least slow the pace of upcoming increases in borrowing costs.

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