Overseas macro: employment is less than expected, which is difficult to prevent taper from accelerating
Although the US non farm data in November this year was less than expected, from its reasons, the Fed's continued water release may not play a substantive role, but will push up inflation. From the recent statements of Powell and many Fed officials, accelerating the completion of taper may still be a probability event.
From the change of non-agricultural employment, the non-agricultural employment in the United States increased by 210000 in November, the lowest since December 2020. The epidemic caused by delta mutant strain was generally good in October, but the epidemic repeated again in November, and residents' concerns about the epidemic increased. At the same time, the current epidemic has led to permanent changes in the employment concept of many Americans. Their cherishing of life makes them unwilling to start working immediately even if they lose their income. In addition, since the beginning of this year, the sharp rise in U.S. stocks and the rising U.S. House prices have produced a certain wealth effect. The above reasons jointly promoted that the number of new non-agricultural employment in November was lower than expected.
Earlier, Fed chairman Powell changed the expression of "temporary inflation theory", saying that it was time to give up the word "temporary" inflation. At the same time, he said that the Fed might complete taper faster and would discuss it at the FOMC meeting in December. In addition, recently, many Fed officials have expressed their position to accelerate taper. Therefore, we believe that, on the one hand, the short-term employment disturbance is less than expected, which may be difficult to stop the accelerated process of taper; On the other hand, the lower than expected employment also shows that the Fed is still far from the threshold of raising interest rates. We maintain our judgment that taper may accelerate from January 2022 and complete it in March 2022. The first interest rate increase may still be in the fourth quarter of 2022.
